australian green shoots

Risk is bid on headlines that the Reserve Bank of Australia unexpectedly raised rates 25 bps to 3.25%.

Carry traders unite!

Stocks, Commodities Climb as Australia Raises Interest Rates

the emerging EM trend

The Obamas failed on their bid for Chicago 2016; this may be confirmation of a longer term trend.

Rio Wins 2016 Olympics as Lula’s Lobbying Beats Obama

apple and goldman sachs are on fire

Apple and Goldman Sachs are two large cap names that have outperformed SPX by more than 70% YTD.

Both AAPL and GS have rallied back to pre-crisis levels.

(AAPL in unrelenting uptrend while both XLK and GOOG vs. SPX are trading relatively sideways)


Perhaps these names are in their own worlds. Other indicators of paper assets, such as XLF relative to SPX and GBP, have been losing upside momentum of late.

I am closely watching whether GS and AAPL continue their leadership as confirmation that the broad market uptrend is intact.

(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.

forward japan

Analysts have argued (myself included) that future inflation will result from the government's massive economic stimulus policies.

We have just experienced the greatest financial crisis and credit deleveraging in a generation. Is it realistic to expect inflation in two, five, or even ten years from now? I've been pondering the possibility of Japan-style price action in the US.

Hussman and Gross have considered this (Hussman speaking japanese, Gross a buyer of treasuries).

(chart source: kshitij.com)

the jobless risk rally

New York City's unemployment rate is above 10%. Now this, the ratio of unemployed to job openings is exploding.

The government cannot end quantitative easing nor ZIRP any time soon.

Deflation first, then inflation?

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.