Daily Alert – Wednesday 28th October 2020: Covid fears fill the pre-election vacuum

Mark NugentDaily Alert, Oct 2020

Daily Alert – Wednesday 28th October 2020: Covid fears fill the pre-election vacuum

At the midpoint of the week we are solidly risk-off as Covid concerns fill the pre-presidential election vacuum. US equities are significantly down. Oil is dropping towards USD37/bbl as I write. GOLD falls on the strong sentiment-driven USD.

What do we do when sentiment is sour? We look to the JPY to rise as a safe haven asset. And that is what we see in our custom-build currency index charts. I traded the strong JPY on Monday at the daily close. I am now around 3 times risk in the money. That’s another 3% added to my investment account. In a week. In my pyjamas.

I will not trade equities on the way down as it is against my fundamental analysis of equities as an asset class. I will instead wait for the reversal and trade them on the way back up. This has worked, profitably, for years.

I’ll be back on Friday.

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