This is the biggest DAX rally in nearly three years. Yet it still doesn't clear high-level technical resistance in this developing bear channel. The techs here look like the techs on EURUSD. Both seem to reflect the caution in expecting a swift and straightforward end to the Greek debt standoff.
The negative correlation between the S&P 500 and VIX is -0.82 (20-day rolling, valued based) - both the weakest in six months and still extreme. Buying dips and selling pops in volatility has proven a favorite from short-horizon traders. Yet, the potential in that approach has dried up. Only a matter of time.
Here we have the Shenzhen Class A Index (another Chinese equity benchmark) and the CBOE's China Volatility ETF. Despite the epic tumble Chinese indexes have experienced this past week, volatility levels are still remarkably mundane. Risk appreciation is low globally, but disparities like this will make it increasingly obvious.
Equities in general are a good measure of speculative appetite as one of the most familiar and accessible 'high return' assets. That said, these speculative chase assets are showing varying signs of health. The US-based S&P 500 has truly struggled to extend its incredibly consistent move. Asia may prove the greatest risk though. The Shanghai Composite isn't in...
Implied (expected) volatility levels - both at the FX level and measured by the CBOE's own indicator - do not reflect properly the building pressure in the political/economic/financial situation surrounding Greece. Traders arbitrage price, but divergence from appropriate risk appreciation is just as influential.
The Greenback and 2-year Treasury yield are great measures of market anticipation of monetary policy. Since the world is generally at zero bound rates, even small changes in speculation generate out-sized price adjustments to rate speculation. Government bonds are the most connected assets to monetary policy changes, while 2-years is the developed economy central...
After the biggest volume day in VIX futures this year yesterday turnover cools significantly on the market's 'recovery'
I continue to watch for signs of correlation between Greek capital markets and the value (proxy for use) of Bitcoin. Back in 2013, Cypriot capital controls looked to significantly increase the adoption of the cryptocurrency as wealthy foreigners used new channels to repatriate their funds and avoid account lock up and potentially new taxes. Greece doesn't have...
Indecision can be a frequent companion of anxiety. With the Fed decision due Wednesday, few dollar traders will be willing to take major positions on the Greenback - bullish or bearish.
Greece's financial and economic ills are a definitive concern for the Euro area. It doesn't surprise that the region's ETF and equity benchmark impose an indelible mark on the performance of the regional currency. However, QE is starting to be seen as a silver lining to other equity indexes (DAX, CAC, IBEX). Will Greece find the same peace and further stabilize...
The RBNZ rate decision is due this coming session. There is a 40 percent probability of a rate cut priced into overnight swaps. That means there will be plenty of debate on both sides as to whether the central bank will ease or not - and therefore there is likely to be a high 'surprise quotient' in the outcome one way or another.
Is this the inverse head-and-shoulders pattern Bond maven Bill Gross was referencing when he said these patterns are popping up across global yields charts? This is something of a strategy for a traditional inverse H&S pattern, but it still technically meets the requirements. More convincing is the fundamentals. Sure yields can go negative, but what's the...
Bond Commander Bill Gross said there are inverse H&S patterns in that are breaking across global yields. Normally, this would be a sign that equities are on the way up as speculative appetite rises. However, stocks are not oversold and the correlation between the two have been positive. Is this a 'bad' sign for market appetite?
Volatility is rising for the EURUSD as key levels come into view. Is this a trend candidate? Fundamentals say that is unlikely.
Theoretically they should be mirrors of each other; in practical terms, the VIX and XIV do not move in lock step in opposite directions. That being said, which has the more convincing technicals?
EURUSD volatility remains exceptionally buoyant (whether you look at implied volatility or just ATR). Swinging heavily between 1.1500 and 1.0500, it would seem that this would be leading us to a clear and prominent trend. However, fundamentals present a much more complicated picture that will be more difficult to overcome than a mere technical break is capable of securing.
What differentiates the 'The Great Financial Crisis' that was amplified by Lehman Brothers from some of the false starts on other key market developments that have transpired over the past six years? Will the S&P 500 cue the next 'risk off' phase or do we need to look wider?
The FTSE Greece ETF (GREK) has turned to a clear range. The consolidation after the substantial decline is somewhat surprising and somewhat not. On the one hand, the situation is not being resolved. On the other, there has already been substantial depreciation against other Eurozone markets where QE has offered strong levitation. A range now looks like a price...