(re)allocation

The bid for risk assets has seemingly stalled as we begin the fourth quarter.



Taking a step back from today's sell-off, this may turn out to be another pause in the fastest recovery rally since the great depression.

The bears observe rates breaking lower and the possible bottoming out of DXY.

The bulls will just point to what has been working all year; long the QE uptrend in SPX, credit, and beta.

VIX is still holding

Equities and credit continue to rally yet VIX remains range bound. The last time VIX traded in the 22 to 25 range, SPX was trading 1250 to 1300. The long bond has been rallying indicating renewed bets on deflation.