rich against US 30’s, their primary anchor: Yes they have been richer but this will do because US 30’s are also rich. Their primary anchor is 10’s: So what is there in global fixed income to buy that is not...
Read MoreStep 1 I’ve explained what an anchor is and how I do consider its price trend to have predictive value. Gold is very dependent on currency trends but diverges frequently enough that it’s better to also take its price...
Read MoreFirst let me start by suggesting a grand macro problem: If the Yen comes apart it should get more expensive to Japan’s enormous budget deficit, especially considering its current account has swung from a giant surplus to a...
Read MoreOn Friday I recommended buying 2 British Pound contracts verses selling 1 S&P 500 [mini]. The trend in the S&P 500 contract is still negative – shocking given how strong the market has been for the last week and...
Read MoreMy S&P 500 (mini) volatility model is bullish and volatility is very oversold, which matters in this case: The S&P 500 is in a negative (weak) trend: It is overbought but that is somewhat redundant since that calculation...
Read MoreEquity markets have taken a hit while oil prices have suffered much less. The trend in oil is negative and the CL contract is neither rich nor cheap verses its primary anchor. If we can find a reason to buy an equity index then...
Read MoreAs we know currencies are positively correlated with equity indices. I look for extreme conditions to put one on against the other and today the Swiss Franc is looking very cheap – both verses its primary anchor and verses...
Read MoreAs the stock market has fallen over the last few days, various currency markets have been quite resilient. Their relative out- performance creates a logical trade. Here is the chart of the Australian dollar where you can see how...
Read MoreThe markets have been deadly dull so it’s hard to find abnormalities between markets. The only thing that’s come up in the last few days is this: JGB’s became expensive while both their anchors stayed in solid...
Read MoreGilts are really cheap (as of the close of 9/25). The problem is that there are no other bond markets to short against them [none are rich]. Equities of course have a negative correlation to bonds so if they are cheap we have a...
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