Back in early summer this year the US had a “second wave” which I think was probably just an extension of the first wave because of re-opening measures.
However, the real second wave is starting to show its teeth now in Europe. Granted Europe has been open for a few months and life was far closer to normal than over here in the US yet they are now facing more cases than they did in the first initial wave (particularly in France, Spain, and the UK).
This actual delay in rising cases is what can be justified as a different wave because it was not a direct result of government measures or policy changes.
Not to mention Paris and the UK are working on second lockdown procedures which should take place in the coming week or two.
Now as I’m sure most of you remember from the time cases went parabolic in Italy to when they reached the United States was about a 3 week delay and I would anticipate around the same thing this time. Yes I know there are travel restrictions, but there were last time as well and clearly things got through.
I also have some close personal DD from a friend of mine who said his hospital got slammed with cases for the first time in months within the past week.
The point is I’m about as big a bull as you’ll ever meet but can’t help ignore the fact that there is the possibility of a second wave in the United States, larger than the first one as seen in Europe, with almost the exact same time as a very important political event.
Now I don’t think smart money in blindsided by what is going on Europe here, but you don’t have to get caught off guard if it plays out again too. I don’t want to go into lockdown as much as the next guy but we all know that New York and California will not be afraid to pull the trigger if there is a surge in cases a few weeks from now which could lead to other states choosing to do the same.
Truthfully I think this is the perfect time and actual legitimate reason to hedge your bets with SPY puts or SQQQ calls because if there’s one thing the FED can’t out-print it’s the fear behind a second lockdown.
Tl;dr: Europe is going into a second lockdown soon, actually a good time to buy SPY puts or SQQQ calls imo.
Forgot to add some sources:
Disclaimer: This is a guest post and it doesn’t necessarily represent the views of IWB.