Submitted by Kevin Muir via The Macro Tourist blog,
Remember last month when everyone was hot and bothered about all the TRUMP trades? Whether it was long Russell 2000 futures, short bonds, long US dollar or short gold, most market participants were busy extrapolating the violent market moves months into the future. You were deemed an idiot if you didn’t buy into the ‘Trump will fix everything’ mantra. Even supposedly long term investors like Warren Buffett were busy chasing the stock market higher.
At that time I created a volatility weighted TRUMP basket of those four trades (long small caps & US dollar while short bonds & gold) that I viewed as the poster children of Trumphoria. In early January I warned this TRUMP basket was already acting poorly and might have bad news written all over it.
How has it done since then? Well, it has continued to drift lower. It even hit new lows for the corrective move yesterday.
This post was published at Zero Hedge on Feb 10, 2017.
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