This trade was entered on the 14 Feb, I forgot to update it on here. At that point my LVS option trade was performing very well and moving somewhat independently from the broad market. However this changed on the Week of the 15 Feb when Retail and CPI results turned out stronger than expected.
I'm not exiting because I believe the hypothesis still holds and what we are seeing is a broad market reaction which should normalise and then we can make a clearer decision. I expect normalisation to happen on the week of the 7 Feb (Monday, 6 Feb is a bank holiday).
---- Trade Hypothesis ----
It looks like in the short term traders will be more concerned about interest rates and the impact it will have. The sentiment now seems to be that recession will be a soft landing. I think we need to trade on this optimism at least for the next month.
Lets look at categories with strong fundamentals where money might flow into given it’s stability
Resorts and Casinos especially LVS is prime because of China opening up. Most of LVS' casinos are based in Macau and one in Singapore. Similar to the travel industry, we should experience once again the spending power of China's tourism force
I'm not exiting because I believe the hypothesis still holds and what we are seeing is a broad market reaction which should normalise and then we can make a clearer decision. I expect normalisation to happen on the week of the 7 Feb (Monday, 6 Feb is a bank holiday).
---- Trade Hypothesis ----
It looks like in the short term traders will be more concerned about interest rates and the impact it will have. The sentiment now seems to be that recession will be a soft landing. I think we need to trade on this optimism at least for the next month.
Lets look at categories with strong fundamentals where money might flow into given it’s stability
Resorts and Casinos especially LVS is prime because of China opening up. Most of LVS' casinos are based in Macau and one in Singapore. Similar to the travel industry, we should experience once again the spending power of China's tourism force
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Also despite the market wide drop on the 22 Feb, LVS held and made a small gain. I believe this because of my hypothesis on the China reopening growth expectations