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Global Market Recap wk2 thread
• temp RISK ON mode continued
• FED blinked, dovish hopes
• previously oversold conditions
• seasonal effect
• stocks, EM, energy, cmdtyFX up
• creditspreads, VIX down
• temp RISK ON mode continued
• FED blinked, dovish hopes
• previously oversold conditions
• seasonal effect
• stocks, EM, energy, cmdtyFX up
• creditspreads, VIX down
...in context to the overall matrix, this RISK ON theme is a few weeks old after heavy beating before.
very high / elevated VIX before indicated wide range = high uncertainty, FED is currently trying to calm markets. THATS IT.
The key question really is = is the FED done ?
very high / elevated VIX before indicated wide range = high uncertainty, FED is currently trying to calm markets. THATS IT.
The key question really is = is the FED done ?
... because last 1-2 weeks rebound could very well be just as it is, a rebound. a retracement of previously oversold situation but in the current overall big theme = GlobalSlowDown and TechnicalRollOver
... Credit Spreads in the US "rebound" = tightening (inverted scales) as RISK ON sentiment continues at the moment...
however, spreads may have been oversold too, trend is clear, SMA is sloping. = as of now = counter trend rally
however, spreads may have been oversold too, trend is clear, SMA is sloping. = as of now = counter trend rally
...here is a sample of RiskOnOff ratios and spreads across stock sectors, fixed income and FX
rebound is across the board, but here too, the trend so far is very much in tact, hence at this point, it can just be a temporary counter trend.
rebound is across the board, but here too, the trend so far is very much in tact, hence at this point, it can just be a temporary counter trend.
...biggest collapse is in VIX.
FED blinked, got the market message, lots of dovish tones and comments, which was followed by short cover, fast money longs and new investment.
Market though wants no more hikes, stop QT and China stimulus ?
FED blinked, got the market message, lots of dovish tones and comments, which was followed by short cover, fast money longs and new investment.
Market though wants no more hikes, stop QT and China stimulus ?
... my CDX / SPX YoY "model" also reflects the rebound, and yet, it's far away from getting a long signal.
...and looking at the BofAML HY spread (which did NOT give an early warning signal like all my other indicators, but blew out lately), had a sharp tightening too.
But, this could be one of many end-of-the-cycle-signals, Spread needs to break SMA, what does that take ? FED !
But, this could be one of many end-of-the-cycle-signals, Spread needs to break SMA, what does that take ? FED !
...M.PMI heatmap
...keep it mind the global macro big picture...
There is a reason for the recent multi-months new lows in the business sentiment surveys.
Only a dovish FED, PBoC stimulus will change that. ECB just stopped QE.
...keep it mind the global macro big picture...
There is a reason for the recent multi-months new lows in the business sentiment surveys.
Only a dovish FED, PBoC stimulus will change that. ECB just stopped QE.
1am in London. good night. have a great week ahead. x
