Meta Strategy Trading Portfolio – Probability Map Update.

– Positioning Update Wednesday –

More Volatility Incoming

Uncertainty continues to reign with the near-term course for risk assets hanging by the thread of a tweet.

A high volatility forecast is not inherently directional, but last week gave clear pointers towards the more negative of my three primary scenarios for stock market returns over the coming months.

Both the Trump Put, as well as the FED Put, are quite clearly defined now and their combination continues to signal risk-off for stocks – there is no immediate stimulus packet ready to come to the rescue.

With a a V-shaped recovery scenario off the table, probabilities for a volatile, months-long bottoming process are highest.

However, the likelihood for a recessionary bear market is shooting up from a low base level, as a significant slowdown in global trade, which weakens economic activity, is clearly beginning to show up.