Daily Alert – Wednesday 7th October 2020: Trump talks the markets DOWN

Mark Nugent Daily Alert, Oct 2020

Daily Alert – Wednesday 7th October 2020: Trump talks the markets DOWN

Monday was a moderately risk-on, only being 1 point (out of 200) away from strongly risk-on, something we have not seen since the 5th June. I entered long on the S&P500 and AUDJPY (trading a weak JPY). Things were pootling along nicely on Tuesday until Trump announced that he was ending the corona relief package negotiations until after the election. Risk sentiment turned sour and equities fell and the JPY strengthened. This took out both my trades for a loss of around 1% of capital per trade.

However, I was confident that these assets would soon reverse as Trump’s announcement, although unexpected, didn’t change anything. There will be a relief package and no one was really expecting one before the election anyway. So I re-entered both trades via pending orders and so far they are doing well as risk sentiment turns positive again today.

Later tonight we have the FOMC Meeting Minutes which are unlikely to move the markets. Early tomorrow morning we have the Vice-Presidential debate in the US. The debate is unlikely to be the car crash we saw between Trump and Biden last week but it is also unlikely to move the markets.

I’ll be back on Friday.

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