The Big Unraveling
The Big Unraveling
It seems that the big unraveling in equities has switched into second gear.
If you are still positioned to the long side I have two charts you should see:
Exhibit A: The AUD/JPY against the spoos. The AUD/JPY has been leading equities in the past few months, however lately a new trend has emerged in which equities (and thus the ES futures) completely started fading any downside in the AUD/JPY. Today this apparent unraveling has kicked into second gear as the two are now moving completely against each other.
Exhibit B: 10-year treasury bonds against the spoos – the former here shown as its inverse moving yield (TNX). In general (and some will argue this point) equities and the TNX move in tandem. This more long term chart shows a distinct detachment by equities (and index futures) traders as of late. However, today’s respective moves tops the all time charts – and someone has to explain to me how/if that makes sense.
The big unraveling that I expect to ensue in the near future won’t be kind to anyone with long exposure in equities. I strongly recommend that look for exit signs near you. You have been briefed.
Cheers,
Mole
