I will be brief. Beta is underperforming since April 20. Energy stocks have begun to underperform since then as well even though oil continues to chug higher. Overall the market looks weak. The sell off since since 4/20 low has been massively slow and choppy. The transports look awful. We should Gap down tomorrow, however, it is Opex week and I can’t believe the dealers want a repeat of August last year when they lost control.
The bottom line is that government bonds seem to be signaling recession while credit issuance has been very strong of late and spreads remain relatively calm. The market is unlikely to gather steam on the downside unless credit begins to deteriorate again. The European banks have troubling looking charts. There is a chance that equity could lead credit lower as we begin to see a serious selloff.
This is a treacherous market. Stay nimble. Ultimately we should see weakness and then a likely QE4 stick save. I don’t think the TPTB let this market go below 1600.
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I thought this might be the type of setup that could lead to a flash crash. Awful lot of puts bot and I do not think the dealers have pawned off their long positions.
Agree that it would be bad P.R. to flash crash in order to square their books.
I have placed buy orders on some of my favorite stocks at 20% below their highest price achieved as of 4/20.
patiently waiting 4 the fireworks show. I’m n no rush
I like your pespective blue. While fly and others give a timely and colourful update on market conditions and sentiment, you instead are providing a macro outlook based on solid fundamentals.
I’m more interested in the big ‘if’ that is being presented here. If we are a bear, under present conditions, this could be one for the history books. If we are still moving upwards, ditto. Always good to have a slower and less reactionary outlook to contrast regardless.
Blue
What do you make of this?
http://www.zerohedge.com/news/2016-05-14/liquidity-problems-deutsche-bank-offers-5-yields-if-depositors-lock-their-money-thre
DB Holding the Old Maid?
Down into 2017, up hard into 2018, back down a long way til c.2021.
Enjoy the ride, get some physical gold while you can.
OPEX is on the horizon ready to butt-f*ck everyone
Beta has been outperforming this week instead of last week. I don’t like to see that as a bear.
Blue – a little while back you made a comment along on lines a 5% pullback followed by a re-test of that level could change your bearish outlook. Would you say the last 4 weeks from the April highs to the May 6th low and re-test on 19th have somewhat fulfilled that?
tway,
that is correct. We need to see ath though.