Blue Horseshoe Loves This Finance Blog

Just to add on to some of my previous posts about growing market stress, here's a look at VIXY (long Vol ETF) vs the SPY over the last 5 days... A couple of things worth noting: 1) the VIXY is a levered vol ETF so the scale isn't consistent with the non-levered SPY but the point is clear that perceived risk in the market is rising and 2) the S&P tested support levels today but didn't break down while volume remains light.  This suggests to me that the market is waiting things out and there are two potential catalysts between now and the end of the year... the election (which everyone will be glad to finally have over) and the two final Fed meetings of 2016 (one of which will conclude on Wednesday).

IT'S NOT LOVE I'M RUNNING FROM, IT'S THE HEARTBREAK I KNOW WILL COME I just wanted to make a quick entry today as I see some very interesting patterns forming across asset classes. Since September, my models have been pointing to ever increasing probabilities of an equity market correction but the correction does not appear to be contained to equities.  Here's a look at the relative performance of treasuries to equities and it's clear that they've been getting hit harder than stocks since the end of the summer (treasuries are represented by the blue line)... Corporates have also been taking a bath and now high yield bonds look like they may be turning over too... Other notable safe-haven assets like metals have also been stressed - although gold has moved into a short-term bullish pattern. This is all happening on the backs of a renewed dollar rally as the Fed is seemingly running out of excuses to keep rates at rock bottom levels. Why is this happening?  Many F...

ARMS & THE COVENANT   In 1940, then Harvard undergraduate, John F. Kennedy penned his college thesis on the cause and affect of England's torpor in the face of mounting fascist aggression just beyond its own shores in the 1930s.  The thesis was a reconnoiter of Churchill's While England Slept, which was originally published under the title, Arms & the Covenant.   In his subsequent examination, Why England Slept, the young aristocrat was careful not to lay blame at the feet of those who have come to be associated - justly or otherwise - with history's cursory allocation of abetment.  Perhaps the conspicuous omission was prelude to a fateful temperament that would save humanity or perhaps it was because one of the damned was his omnipresent benefactor and father, Joseph P. Kennedy. Today, domestic equity indices are staring down increasingly ominous signs that threaten their 7-year bull market with reminiscent apathy. Obviously, the modern threat of a needed co...