Friday, March 20, 2020

Making the Most of These Challenging Times

Here are some important ideas I'm sharing with the traders I'm meeting with (in virtual mode!):

*  I see where California is going into stay at home mode, and I expect other states to follow.  This, on top of shortages at grocery stores and fears regarding health, is proving stressful for traders and their families.  This recent Forbes article outlines very specific strategies I'm seeing traders engage in to make the most of this period of "social distancing".  It especially addresses the issue of how to stay in a peak performance mindset even when we're dealing with unique stresses and changes in our work routines.

*  I am working with traders who are doing incredibly well in these volatile markets.  Videos from SMB are outlining some of what these traders are doing.  A key has been staying short-term and nimble, seeing opportunity on both sides of the market and not getting locked into opinions, and taking profits opportunistically.  Trading "move to move" and following the shifts in buying and selling on an intraday basis has been quite useful.

*  I am hopeful about efforts being made to develop a drug to control coronavirus symptoms and efforts to develop a vaccine.  The people I speak with who are far more on top of the science of the virus than I will ever be suggest that these efforts could take a while and, indeed, we're not doing enough to separate people and prevent mass viral spread.  The fight against the virus could be a longer-term warlike endeavor, with ongoing social impacts and impacts on markets.  Particularly if illness is widespread and helps further disrupt supply chains, being prepared by having medications, food, and supplies on hand will be super important.  This is an issue of prudent preparation, not "hoarding".  Please take the time to read this.

*  What to watch:  The excellent SentimenTrader service notes that the RSI for corporate bonds is at an all-time low.  (See HYG).  That means we're pricing in an increasing set of odds of defaults and possible bankruptcies.  Note that the same dynamic is hitting municipal bonds (MUB).  People I speak with are keeping their eyes on these markets for signs that things are improving or getting worse.

*  Twitter has been an amazing resource during this time, both for following markets and for following informed commentary and research on the virus.  I am retweeting articles and comments that I find particularly enlightening.  I do not watch television networks or follow politicized commentary.  Not helpful at this time.

Stay safe and stay together even when we're not physically together!!