The Fed FOMC announced that it would not raise the rate in 2019. The decision surprised many market participants. Most people thought the Fed would leave the rate hike option open for 2019 since the Fed was emphasizing on data dependent. The majors run up then sold off after the announcement. It was a typical ABC price movement. On Thursday the majors broke out to the upside on the Fed's dovish stance. They felt that the Fed is on their back. The bulls were cheering for the clear sky in 2019. Today the German and US PMI were both below their expectations. The market reversed direction to the downside. The selloff accelerated after European closing. SPX and RUT closed down 1.9 and 3.6% respectively. They were the biggest one day loses in 2019. RUT has been weaker than the other majors from the January rally. Is this the beginning of the 2nd shoe drop?
I had several long puts expected to be exited safely based on the breakout yesterday. I had to roll and reverse them on today's selloff. The new daily lows were made at closing. I made my adjustment based on Delta and the margin constraints.
Net liq was reduced to 110K. Leverage is back to 540. The danger is present and clear. I will work out a plan over this weekend.
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