Posts Tagged ‘risk appetite’

Squeezing the lemon – risk appetite being sucked higher

Squeezing the lemon – risk appetite being sucked higher

Courtesy of Rohan at Data Diary

Risk appetite has been ticking higher this past week. The price action in isolation looks pretty positive. The question that is troubling the synapses is whether equity markets are poised to thrust higher once more – egged on by the monetary cattleprod of the US and a seeming stabilisation in China’s growth dynamics.

Risk appetite index 500x291 RISK APPETITE BEING SUCKED HIGHER

Certainly the penultimate rejection of the S&P500 off 1040 set the scene for a short squeeze of material proportions. Given the ramp up in volumes that accompanied the selloff from the April highs, it’d be reasonable to expect that there’d be a block of nervous ‘shorts’ at levels not too far from here. It’ll be interesting to see what the tea-leaves say about who sold/bought in the Flow of Funds data next week, but the 1130 level is looking like a pretty tasty target.

US equities price and volume 500x303 RISK APPETITE BEING SUCKED HIGHER

For the moment, it’s probably wise to respect the price action. It’s a reasonable probability that we run through 1130 while under the influence of that big can of nitrous oxide. With declining participation, any buyers ‘on the break’ will be that much easier to suck in. Witness the ever vanishing activity in CBOE equity options.

Equity option volumes 500x293 RISK APPETITE BEING SUCKED HIGHER

Still my read of the bigger picture has this run-up as a position driven head fake.  Momentum has turned lower since the April high that marked the exhaustion point for global stimulus mark I. It’s looking increasingly unlikely that successive rounds of government intervention will be as wildly successful as the first. While the leading indicators are tracking lower, so will the market.

The other factor tugging at the market’s tail is that the logic for risk spreads to widen remains compelling. The Fed may be the fat kid sitting on the longer end of the Treasuries market, but ultimately the other end of the risk plank can’t join in as the economic malaise works its way through earnings forecasts and default probabilities. This rally should meet its maker over the next couple of weeks – just a matter of whether it can convince him that all those calories can’t be good for you.


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IMF: RECOVERY IS SURPRISING TO THE UPSIDE

IMF: RECOVERY IS SURPRISING TO THE UPSIDE

Courtesy of The Pragmatic Capitalist

European stocks rallied on the day after bullish comments by IMF chief Strauss-Kahn.  At a speech in Japan, Dominque Strauss-Kahn noted that the global economy is recovering faster than expected, but remains largely dependent on government stimulus.  In his speech the IMF leader noted 4 key risks to the recovery:

  • Unemployment is still growing, posing the threat of social unrest and even conflict if not tackled.
  • The risk appetite of investors is on the rise. While investors are still not putting capital into advanced economies, large sums are flowing into emerging economies, including Russia, Brazil, and emerging Asia, creating the risk both of asset bubbles or of a damaging abrupt halt in inflows.
  • The financial system remains damaged. Japan’s experience with its own financial crisis since the late 1990s shows that recovery begins only when companies and banks have cleaned up their balance sheets.
  • The timing of unwinding of government stimulus measures is crucial. Although governments are now saddled with high debts from the anti-crisis measures, trying to remove the stimulus measures too quickly could result in a “double dip” recession, with advanced economies in particular falling back into negative growth.
Although he notes that the IMF does not expect a double dip recession, he says the potential is substantially higher if governments do not maintain their stimulus:
“Our forecast at the IMF is not a forecast of a double dip. But you never know. It may happen and especially if countries exit too early. If they exit too early and we have a new downturn in growth, then really I don’t know what we can do. A lot of our toolkit in terms of fiscal and monetary policy has been used. If we fall back into negative territory for growth it will be very, very difficult to solve the problem, So, our advice is to be very careful.”

The implications here are clear.  Expect governments to maintain their accommodative stances for some time to come.

You can see more from Strauss-Kahn here:

 


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Kimble Charting Solutions

Silver Could Be Creating Large Reversal Pattern, Says Joe Friday

Courtesy of Chris Kimble

Could Silver prices from 30-years ago be influencing price action this month? Joe Friday suggests it is possible.

This chart looks at Silver Futures on a monthly basis over the past 40-years. Fibonacci levels were applied to the 1980 highs ($50) and 1991 lows ($.350) in Silver.

The 50% retracement levels of the 1980 high/1991 low came into play as support for a few months at each (1). Once this support broke, Silver fell another 50%.

The impressive rally over the past 8-weeks has Silver testing the 50% retracement level as potential...



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Phil's Favorites

Movie theaters are on life support - how will the film industry adapt?

 

Movie theaters are on life support – how will the film industry adapt?

A movie theater in Brea, Calif., has shuttered its doors due to the coronavirus pandemic. AP Photo/Jae C. Hong

Courtesy of Matthew Jordan, Pennsylvania State University

Since the start of the pandemic, the film industry has been in free fall.

As deaths have continued to climb, ...



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Biotech/COVID-19

Wearable fitness devices deliver early warning of possible COVID-19 infection

 

Wearable fitness devices deliver early warning of possible COVID-19 infection

Fitness information from wearable devices can reveal when the body is fighting an infection. Nico De Pasquale Photography/Stone via Getty Images

Courtesy of Albert H. Titus, University at Buffalo, The State University of New York

The difficulty many people have getting tested for SARS-CoV-2 and delays in receiving test results make early warning of possible COVID-19 infections all the more important, and ...



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Zero Hedge

Fake ID Seizures, Mostly From China, On the Rise

Courtesy of ZeroHedge View original post here.

Authored by Petr Svab via the Epoch Times (emphasis ours),

U.S. Customs and Border Protection (CBP) has been seizing an increasing number of fake IDs, including driver’s licenses, in recent years. Most come from China and are good enough to fool an average person, an agency official said.

...

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ValueWalk

Value Does Not Have To Mean Cheap: ANGI A Good Example

By Jonathan Boyar. Originally published at ValueWalk.

It’s a scenario value investors dream about: a growing company whose shares are selling at a statistically cheap price. Of course, these types of stocks can be hard to find—and the search for them may lead you straight into a value trap. But just as a stock selling for a low valuation doesn’t always mean a bargain, a richly valued stock doesn’t always mean value investors ought to automatically look elsewhere. The Boyar Value Group recently identified one high multiple stock that may be worth paying up for. Keep reading to find out more.

Q2 2020 hedge fund letters, con...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Chart School

Silver Big Channel

Courtesy of Read the Ticker

Big channels are the sand pit of price action. Lets review some big trends of these past months.


GLD
- Moving higher to upper solid red line channel


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XAU
- Ready to pause, or simply explode.



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SILVER
- Ready to pause, or simply explode.


Click for popup. Clear your browser cache if image i...



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Digital Currencies

Raoul Pal: "It May Not Be Worth Owning Any Asset Other Than Bitcoin"

Courtesy of ZeroHedge View original post here.

Authored by Turner Wright via CoinTelegraph.com,

Raoul Pal, CEO and founder of Real Vision, says Bitcoin may soon become his only asset for long-term investments.

image courtesy of CoinTelegraph ...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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