The following article is from: Hong Kong Soros (pseudonym)

Edited by: Well Link International Securities

Market Overview

Technical: The S&P 500 (SPX) and Nasdaq 100 (NDX) experienced sharp declines following weaker-than-expected manufacturing data from both China and the U.S. 

Fears of a recession dominated the market, leading to a full day of selling in both indices without any signs of a rebound.

Sentiment:The market sentiment is currently driven by greed.

Market Breadth: The market has moved from being overbought to a more neutral position.

Macro: The weaker-than-expected manufacturing data has exacerbated fears of a potential recession, adding to the uncertainty in the market. 

Upcoming reports, such as the JOLTS (Job Openings and Labor Turnover Survey) and Non-Farm Payrolls (NFP), 

will be closely watched by investors to assess whether the probability of a recession has increased.

Summary : 

Recession fears, coupled with the seasonally weak month of September and the upcoming U.S. elections, have deterred investors from buying the dip, 

resulting in weak market liquidity. In this high-uncertainty environment, pair trading and volatility strategies are recommended.

Stocks:

SVXY: Accumulating SVXY could be advantageous during periods of spiked volatility. However, investors should be prepared for potential further drawdowns if volatility continues to increase.

UNG: UNG offers a good risk/reward opportunity given its strong seasonal cycle.Long LQD / Short HYG: This pair trade provides a favorable risk/reward setup for hedging against recession risks.