Meta Strategy Derivatives Portfolio – Probability Map Update.

— Tuesday update: adjusted position sizes —

Markets at Crossroads

Last week’s whipsaws were mainly caused by FED Chair Powell’s hawkish comments, which went contrary to widespread expectations that increased coronavirus concerns would lead to a softening of the FED’s tightening rhetoric.

The increased indecisiveness and fragility of the market is visible in a plethora of new studies that show that risks for a downward spiral have increased. But currently we are still holding above key support levels, and volatility may just as easily express itself to the upside.

As usual, I map my current data-driven estimates of the probabilities for future returns of the S&P 500 over the short, medium, and long term.