I have a heap of 25 reports to load up this weekend so i will be posting those with some capsyn comments. Briefly though this just hit my electronic desk so i wanted to bring you the latest Fitzpatrick comments here below.
The comments are quite technical in nature but extremely insightful. Happy to pick up any technical matters on the forum as usual. The issue is the spread compression across the yield curve between euro sovereign debt. I would also add euro high yield spread to sovereign yields. They are all uniformly flashing red not amber team. Ill leave the detail to Fitzpatrick below.
Markets send us constant feedback as to where they have a probability to move next. In the last 3 weeks price has added to weight of technical evidence that this bull market is in severe struggle mode.
I’m not a great advocate of chaos theory but i would just comment here that chaos can easily occur quickly here. Several issues are potentially combining here including historically high leverage levels combined with thin market volumes spread across a small number of concentrated market players. Once a turn in the markets creeps in to participant psychology the rush for the tiny exit could have severe knock on implications that no technical perspectives can predict with a high probability. I want to make very clear this is a warning folks not a prediction as yet but some key ingredients are in place.
Many reports to come in next 24hrs.
Here Citi:
All the best
Rich