Charles High Smith writes, “In the conventional investment perspective, risk-on assets (i.e. investments with higher risks and higher potential returns) such as stocks are on a see-saw with risk-off assets (investments with lower returns and lower risk, such as Treasury bonds). When risk appetites are high, institutional managers and speculators move money into stocks and high-yield junk bonds, and move money out of safe-haven assets such as gold and u.s. Treasuries.
But recently, markets are no longer following this convention. Safe haven assets such as precious metals and Treasuries are soaring at the same time that stock markets bounced strongly off the post-Brexit lows.
Risk-on assets (stocks) rising at the same time as safe-haven assets is akin to dogs marrying cats and living happily ever after.
What the heck is going on?
Why is the market acting so schizophrenic? What's changed?”
The decades-long influence of Keynes and the central banks have turned the world on its ear. There are bubbles in stocks, bonds, commodities and, yes, “safe havens” as well.This may be the turning point.
VIX was clubbed on Thursday and again on Friday, even with potential systemic risk hanging over the markets. After all, the market still appears awesome, doesn't it? As a result, it exceeded its “normal” decline of 30-50% back inside the Broadening formation by another 28%. However, payback is coming in a very big way. The entire Wave structure from last August is a huge Bullish Flag with a potential target that is well above the August high.
(Investing) From a big-picture VIX perspective, the price structure is pressing toward a test of its year-long support line — in the vicinity of 12.75 — while at the same time, SPX is pushing up toward a confrontation with every prior high since May 2015, between 2120 and 2134.72.
Friday's mid-day high was 2120.08, which corresponded to an intra-day VIX low at 13.38.
SPX reaches point 5 of tis Broadening Top.
SPX rallied to point 5 of its Orthodox Broadening Top at Friday's close.This is known as the “terminal top” from which a decline may begin. A decline beneath 2100.00 may set a new sell- off in motion.So, who's buying this rally?
(WSJ) A boost in hiring in June catapulted the S&P 500 right near its record closing high and lifted all major U.S. stock indexes back to where they were before the U. K. 'svote tol eave the U. K. 'svote tol eave the
The S&P 500 rose 1.5% to close at 2129.90.
In intraday trade, it rose as high as 2131.71, climbing above its record closing level of 2130.82, hit on May 21, 2015.
(By the way, does anyone see the mismatched comparison in this article?)
NDX surges, but stil has Y-T-D losses.
NDX surged, but could not overcome its June 6 high of 4536.55, nor could it make up the difference to the December 31 close at 4593.27, leaving a year-to-date loss.A failure beneath Long-term support at 4422.08 sets a potential panic decline in motion. The Head & Shoulders neckline at 3900.00 appears to be the next significant formation to be challenged. This appears to be the end of the summer rally and the beginning of seasonal weakness that may last several months.
High Yield Bond Index makes a blow-off top.
The High Yield Bond Index made a blow-off top to its highest point, ever. Note that it reacts to the same pivots as equities, making its high on the same day as the SPX. Investors should now be on the alert for a decline beneath its Intermediate-term support at 153.03 for a probable sell signal. Did the strong issuance of corporate investment grade (IG) bonds crowd out High Yield last week?
(ZeroHedge) The M&A deal was just the beginning. As Reuters reports, the scramble for IG debt is on full force today:
