Carley Garner
DeCarley Trading
- How would you diversify an investment portfolio through the following asset classes ahead of the Election?
The market is pricing in a Clinton victory, but there is still plenty of time for things to change. If they do the markets will react to the proposed uncertainty of a Trump presidency in a violent manner. Accordingly, I believe it makes sense to take a defensive stance in an investment portfolio. After all, if a Clinton victory is expected and priced in the upside in equities is likely limited and the risk will be to the downside. T
US Dollar – 0%
Commodities – 20% (with gold receiving the largest allocation)
Equities – 55%
Bonds – 25%
- Do you foresee any trading opportunities ahead of the Election? Which ones?
I believe we will see a stark increase in volatility as we head into the election and in its aftermath. As is the case with most large events, the best course of action is to keep speculation mitigated ahead of the event to keep capital available to take advantage of potential anomaly pricing once the market has reacted. For instance, those who went long the S&P on the heels of the Brexit collapse likely fared well. Similarly, buying the British Pound into its collapse was initially a good trade. In short, traders should keep plenty of fire power available; any large fallout in the equity market or the US dollar could provide favorable opportunities for the bulls.
Due to the volatile nature of the futures markets some information and charts in this report may not be timely. There is substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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