MAXIN GLOBAL FUND - USD is a Long / Short Directional hedge Fund incorporated in Luxembourg. It started trading on February,22 2022 and replaces MAXIN ADVISORS' MODEL PORTFOLIO which has been trading since January 1st 2014. At MAXIN ADVISORS, we manage FULLY TRANSPARENTLY and publish the transactions on a DAILY basis and the details of the portfolio on a WEEKLY basis.
MAXIN GLOBAL FUND – USD
Transaction Update 27 Oct 2022
Despite the extreme and irrational activity in Chinese equities, our activity at the moment is concentrated in the US where the volatility is not less extreme. Earnings are rolling out with good news and bad news and, in an environment of very negative sentiment, companies that are reporting disappointing growth prospects are being severely punished, GOOGL, META and AMZN being prime examples.
Today, a number of our stop loss or protect profits orders were executed.
In the US, we were stopped out on INTEL and AMAZON, and took profits on NVIDIA. Conversely, we added to positions in GOOGL and META, re-instated our trading position in MSFT that we had sold higher up, took our profits on our long position in the RUSSELL 2000 Index and re-instated our short position in the Nasdaq 100 Index in a tactical way.
We also took some trading profits on our long position in the US Government bonds ETF.
In the UK, we took our profits in RENTOKIL and on our FT100 Index Future position.
In Gold, we took some trading profits on our long Gold Miners position and our protection STOP LOSS on our long GOLD Future position was executed.
As always, we are trading our positions one by one within our strategic roadmap.
First, let’s address China. Chinese equities are in an irrational trend-ending bottoming process where the volatility is such and the extremes of over extension makes it dangerous to try to manage exposure in the short term. Volatility is there and we expect the phenomenon to end this month with a very sharp rebound to unfold very soon, The Chinese tech sector has already bottomed and it will take very little for the rest of the market to complete its bottoming out. So we have to live with the volatility unfortunately.
On the global macro scene, as expected, US bonds and the US dollar have already turned.
We expect the FED to hike rates by 0.75 % in November and 0.5 % in December and re-affirm its ultimate objective of 5 % Fed Funds for a 2023 peak, levels that we had articulated already months ago.
As a result, and as expected, the US dollar marked a temporary peak at 115 earlier this month and we expect the DXY to fall to 108 in the coming two months before another challenge of its all-time highs ad a final target at 117 / 120 in the first half of 2023
As we also expected, US 10-years government yields have turned, are currently testing the 4 % support and we expect them to fall to 3.50 % in the year-end as inflation and monetary policy pressures ease ahead. We have taken some trading profits on the rebound but remain structurally long bonds. Equally, we are of the view that we have seen the worst in long-dated corporate bond yields globally.
When it comes to US and European equity markets, our year-end bear market rally roadmap is unfolding as expected with the October 13 bottom that we predicted holding. We see the US indexes correcting into next week’s FED meeting. We expect the SP500 to reach the 1750 / 1680 area and the Nasdaq 100 testing the 10900 / 10800 levels next week before rebounding towards 3900 on the SP500 and then rallying into year end towards the ultimate target of 4150.
We have positioned ourselves tactically in the futures going short the SPX and the NDQ and taking our profits on our long position in the Russell 2000 until next week.
When it comes to the US technology sector and mega cap, the earnings season was devastating for some and unfortunately our stop loss orders on META and GOOGL were not executed. On the other hand we made some good trading profits on our other long positions.
Now that the bad news is over, the US technology sector is deeply oversold and will see a strong rebound into the year-end as the psychology of investors turns less negative overall, on the combined narrative of mild economic growth and easing inflationary pressures.
META has already lost 75 % of its value since we started shorting the company at the peak and is trading at 9 x earnings, MSFT and AAPL are holding their October lows, TESLA has rebounded strongly from its earnings disappointment selloff, the semi conductors are reporting in November but are deeply oversold, and the global sentiment has turned resolutely bearish on the sector, paving the way for a strong rebound into the year-end.
As always, we will be trading the stocks individually, with the constant objective of ultimately generating realised profits on all our positions.
With the turn in bonds and the US Dollar, and considering the still prevalent negative sentiment, we can only advise investors NOT to chase the bear side further.
As the Month of October ends on Monday, we shall not publish a weekly report this week-end but will do so on Tuesday November 1st.
And, for family events reasons, we shall not be publishing our Weekly Market Review either this week. Please accept our apologies.
New Asset Allocation
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