10.04.25 - Lack of buyers

The Nikkei index in Japan and European indices surged this morning, following the strong rally in the US yesterday.

The European Union has decided to postpone countermeasures to US tariffs for 90 days.

In the US, inflation data (CPI) released this afternoon came in surprisingly lower than expected. Prices rose by 0.1% in March, down from 0.2% last month (forecasted 0.3%). On a yearly basis, inflation stands at 2.8%, down from 3.1% (forecasted 3.0%).

Markets:

My view: Give up gains and are trading negative in the US. Oil price slumps. US interest rates are going up, even with lower CPI data. Gold back over USD 3’100/oz while US dollar is losing strongly.

As I already mentioned in my last post shortly after midnight, I do not believe that this rally will last as buying stocks after such a day, there is a small chance to materialize. Parallels are being drawn to the biggest intraday rally in 2001, when Nasdaq gained over 14%. Following that, the index lost more than 50%, and it took six years to return to break-even.

At the moment, having access to a trading platform with pre-market capabilities is valuable. Currently the moves in the pre- and after-market trading hours are significant, offering opportunities.

As a result, I closed my short volatility position this morning with profit and have since opened a long volatility position by purchasing an ETF. Additionally, with the rally reaching extreme levels, I have initiated new short positions on the Nasdaq and in semiconductors.

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