Meta Strategy Trading Portfolio – Probability Map Update.

The Trump Put

We now know where the pain point lies at which the U.S. president is likely to fold his cards and come in with significant market support.

This relieves some of the current uncertainty, which resulted in a massive spike higher across all risk-assets last week.

Continued negative reactions from the bond market indicate a distrust-driven liquidity drain away from U.S. assets that can continue for many months – we are not out of the woods yet.

An adjustment period with a significant slowdown in economic activity often leads to an extended high-volatility regime and an undercut of the crash low several weeks later is most consistent with a volatility shock, as the one we have just been through.

I currently see most commonalities with the 1998 and 2011 market declines.