5/15/2019
BLUF: 50% C & 50% S...so I moved the first position on Monday, today I will move the second position, then wait until the end of June…this is a higher risk allocation for most, you will never go wrong with time-discipline and leaving some in reserve.
What’s next in the Trade-War Narrative of probabilities & likely outcomes….
“However, some economists actually hold Trump’s position and opine that the PBOC might have to cut rates sooner or later in the face of China’s deteriorating economy. Rate cuts in China would devalue the yuan and make the dollar too strong therefore making America’s exports expensive and uncompetitive. To counter this, the Fed might be forced to follow suit and lower rates as well.
That’s exactly what Trump, and the markets, have been wishing for.”
safehaven.com/invest...nt-Of-Trade-War.html
Triggers:
1. Likely….G20 Summit is 28-29Jun in Japan….look for any modicum of a solution by or at that event, Thumbs-UP so goes the market, Thumbs-Down so goes the market…look for another sell-off/Pullback after that event with no solution/continued kicking-the-can-down-the-road…Mr. Market is betting on a solution, then…
***Remember this Trade-War-Narrative is much more hype in the media, but once a narrative becomes common-knowledge, then that dynamic drives markets regardless of the facts or the truthiness…do not get hung up on the media talking up a meaningless agreement
2. As per above, Asia/China economies are in a downtrend cycle and getting worse, China will be forced to lower there rates i.e. devalue the yuan which leads to an increased value of the USD which further increases the squeeze on USD and the scarity of USD liquidity overseas (EuroDollars) and continuing the punishment in emerging markets…this will force the Fed to lower rates in the 4th QTR, not guaranteed, because nothing with the Fed is a guarantee but it becomes more likely i.e. pushing the markets higher to that 3000-3500 level in the SPX.
Current PRI-COA: (05/15/19) I will go 50% S-Fund & 50% C-Fund…”Expecting” (Hi or Lo Value word depending on your wager) Trade-War-Solution by end of June followed by Fed-Rate-Cut in 4th QTR, one without the other will still push the markets higher just not as high. I will continue to watch/read/listen to the noise and if I do not think the Fed will act (high probabiilty of a head-fake) then I will take profits and move 100% back to either the G or F…if we get both triggers then I will ride the initial wave and sell into that wave, take profits and wait for the next opportunity…TBD, hopefully a 2020-Correction!
Note: The Medium Term (6 months) is our Short-Term, Long-Term is 12 months and further….”NO ONE” can predict anything in the next 3 months, we can only react to include the Fed!
Disclosure: This is an as-needed-assessment that I provide for my own learning that I share with others to form their own educated assessment. The past 12 months of TSP returns ending 04/30/2019 is 33.36%. I am a 29-year military veteran and current civil servant in the government. Thanks for reading!
BLUF: 50% C & 50% S...so I moved the first position on Monday, today I will move the second position, then wait until the end of June…this is a higher risk allocation for most, you will never go wrong with time-discipline and leaving some in reserve.
What’s next in the Trade-War Narrative of probabilities & likely outcomes….
“However, some economists actually hold Trump’s position and opine that the PBOC might have to cut rates sooner or later in the face of China’s deteriorating economy. Rate cuts in China would devalue the yuan and make the dollar too strong therefore making America’s exports expensive and uncompetitive. To counter this, the Fed might be forced to follow suit and lower rates as well.
That’s exactly what Trump, and the markets, have been wishing for.”
safehaven.com/invest...nt-Of-Trade-War.html
Triggers:
1. Likely….G20 Summit is 28-29Jun in Japan….look for any modicum of a solution by or at that event, Thumbs-UP so goes the market, Thumbs-Down so goes the market…look for another sell-off/Pullback after that event with no solution/continued kicking-the-can-down-the-road…Mr. Market is betting on a solution, then…
***Remember this Trade-War-Narrative is much more hype in the media, but once a narrative becomes common-knowledge, then that dynamic drives markets regardless of the facts or the truthiness…do not get hung up on the media talking up a meaningless agreement
2. As per above, Asia/China economies are in a downtrend cycle and getting worse, China will be forced to lower there rates i.e. devalue the yuan which leads to an increased value of the USD which further increases the squeeze on USD and the scarity of USD liquidity overseas (EuroDollars) and continuing the punishment in emerging markets…this will force the Fed to lower rates in the 4th QTR, not guaranteed, because nothing with the Fed is a guarantee but it becomes more likely i.e. pushing the markets higher to that 3000-3500 level in the SPX.
Current PRI-COA: (05/15/19) I will go 50% S-Fund & 50% C-Fund…”Expecting” (Hi or Lo Value word depending on your wager) Trade-War-Solution by end of June followed by Fed-Rate-Cut in 4th QTR, one without the other will still push the markets higher just not as high. I will continue to watch/read/listen to the noise and if I do not think the Fed will act (high probabiilty of a head-fake) then I will take profits and move 100% back to either the G or F…if we get both triggers then I will ride the initial wave and sell into that wave, take profits and wait for the next opportunity…TBD, hopefully a 2020-Correction!
Note: The Medium Term (6 months) is our Short-Term, Long-Term is 12 months and further….”NO ONE” can predict anything in the next 3 months, we can only react to include the Fed!
Disclosure: This is an as-needed-assessment that I provide for my own learning that I share with others to form their own educated assessment. The past 12 months of TSP returns ending 04/30/2019 is 33.36%. I am a 29-year military veteran and current civil servant in the government. Thanks for reading!