2015 was always going to be a volatile year. US markets have stalled in terms of momentum and selectivity is rising but I agree with the Swiss team that, for now the bull trend is holding and certainly above 2077 sp500 the trend remains our friend and is higher. Europe’s sell off is entering an official “correction” territory. Indexes like the ibex35 need to turn urgently here and now or else this will attract more sellers and the move will gain even more momentum. The level around here 11200 or so on the ibex needs to hold. The next few days could see an intra day test of the 11,000 level and for price traders we want to ideally see a strong rejection off this level to believe higher prices are coming.
I am travelling at present and its the time of the year for moving boats from winter to summer moorings. Nonetheless tomorrow ill update this with the comprehensive list of reports from the usual quarters. Personal comment may be limited due to the time constraints but i am watching this and am at a moderately high level of concern here. I strongly suspect we will get a strong bounce here in the coming days and weeks but this bull tired and vulnerable. Risks to asset markets are rising here.
Here the swiss teams latest:
And here a big shift for GS:
Still a conviction 3 on eurostoxx50 but note the gbpusd short has turned neutral from a conviction 3. That implies a big disappoint for gs and position covering. It was indeed a hard and fast move up to the 1.55 area. Aud shorts remains and aided over night yesterday of course.
Here Fitzpatrick:
Fitzpatrick is right to be worried by rising rates. I notice spanish yields have nearly doubled in the last month from 1% on the ten year to 1.8% today. And whats worse alongside an equity sell off which is very strange indeed. Should we be surprised by peculiar price movement such as these?
No. Central banks have made down up and up down with their manipulations. They have made professional risk management almost impossible which given record high levels of nyse leverage etc is a dangerous mix indeed. I suppose they feel they can always bail out the system by quantitatively adjusting the money supply if another black swan emerges. They assume a level of invincibility now of course which is very dangerous indeed of course but this is where we are.
More to come.
Rich