re: There are some major issues lurking in the US financial markets

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but I'm starting to wonder if the markets might be trickling up in a manner that is starting to have these market bounces already baked in the cake

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I'm starting to think it is. I don't think the market is going to be very sensitive to the outcome of the government shutdown, and according to a WSJ article last night ( LINK), it appears as though these U.S.-China trade negotiations are going to drag on for several more weeks without any spectacular breakthrough press announcements.

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For now, Vice Premier Liu He is planning to meet with his U.S. counterparts including U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin for negotiations on Jan. 30 and Jan. 31, according to people briefed on the matter. These people caution that the plan could be delayed by the partial U.S. government shutdown.

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So I went ahead and started tip-toeing back into short positions this afternoon, going for SPX put options this time rather than using the SPXU inverse ETF.

I got K = 2350, T = 6/18/2020 for $128.00 while the S&P 500 was at 2591.81 and the VIX was at 18.55. We'll see where it goes from here.

If the U.S.-China thing goes through the roof, then maybe I'll pull out quickly, but I think this is a good short position that could potentially hold for the duration over the next 17 months.