Why did the market fall so sharply?
There must be a reason. Since the United States is unlikely to raise interest rates, there are only two possibilities left.
The first scenario is to maintain the current high interest rate level and stick to it until the end of the year.
The other scenario is to cut interest rates.
Regarding interest rate cuts, we naturally care about when and how many times they will be cut. At present, experts generally believe that there may be 1-2 cuts, up to 50 basis points. Even if we are more pessimistic, there will be at least a 25 basis point cut. My personal prediction is that the interest rate cut may occur in September or December, and June is unlikely. Now everyone's focus is on the two months of July and August.
Suppose we are the dealer, holding such a script, how will we lay out?
Let's talk about the first scenario. The reason why it is complicated is that the attitude of the US officials has become unusually mild recently. When a villain starts to be polite to you, it is either that he is no longer able to do it, or that he is setting a trap to pit you. But at present, we can't see where the United States is weak.
What's more, this year is an election year, and the reversal of the situation is normal. The United States is now playing with open cards, and many people don't understand and dare not believe it easily.
Judging from the current situation, the probability of the first scenario seems to be greater, but we cannot rule out other possibilities. As for why it is bullish, it is very simple. The market will not let the air force make a lot of money easily. How can a real dealer make the situation so simple? They will definitely find a way to create a situation of long and short double kills, making the market more complicated and unpredictable.
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