Always consider hidden risks
Desloges CFA is a professional investment consultant/ blogger/ trader
with over 25 years of experience working on the buy and sell-side. I
have researched and invested in traditional and alternative asset classes and
worked at Pensions Funds, International Banks and Dealers. More...
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Insight Will be publishing on an un regular basis til mid-September. Will be more active on Twitter August 29 Chinese Yuan: Another Shot Across the Bow for SP500? As China s economic trend lately adds to the world financial markets uncertainties, I think the move of the Yuan will become a must follow as a risk changer indicator in the following months. Here Are Six Ways Central Banks Have Distorted Markets Dysfunction rules the roost in developed-world credit markets, contend Citigroup Inc. analysts. August 25 The Healthcare Sector (XLV) : Unhealthy Technical? But the real interesting part is that we are near testing on a relative basis (XLV/SPY), the Major Support Trendline that started back since February 2011, so critical for Bulls to protect at all costs... Canadian Short Term Bond (XSB ETF): Testing Support? On August 24, we finally tested back the support trendline of that Rising Wedge, all that with no real spike in trading volume. Is This Long-Term Volume Signal A Warning Flare For Stocks? For these signals to be used effectively we must have realistic expectations about normal volatility within the context of a rising trend. Can Stocks Survive Without Stimulus? Stocks always need fresh injections of liquidity to gain ground and surge ahead Fed turns up the volume; market tunes out the message Constant talk about raising interest rates hasn’t convinced anyone yet Why Intellectual Performance Chasing Is Just As Dangerous To Your Wealth The only real way to effectively assess various opinions and strategies is on their own logical merits, regardless of their source August 24 DJ Transportation ETF IYT: At Major Technical Crossroads? The Ultimate Battle for Bulls is to break soon the Major Resistance Trendline to reverse trend as the DJ Transportation Average is the only Major Stock Market Index who did not break out yet technically speaking US Treasury Bond TLT ETF: The Jackson Hole Experiment? It is becoming a Critical Week technically speaking for the TLT ETF as we are stuck into that wedge and ready to break it; is the Jackson Event will then become the Jackson Hole Experiment The Schizophrenic Fed Leading up to the Jackson Hole event, Fed officials have been especially vocal and particularly unaligned. The rhetoric has caused more than a few Fed watchers to use the term “schizophrenic.” Liquidity Risk Is Very Real And Really Not That Hard To Spot And Define One very prominent element of this global shortage is the repo market, and it connects not just systemic illiquidity across various formats (and currencies) but also ties together the economics of the interest rate fallacy China caught in 'dead money' trap as central bank pleads for fiscal stimulus Struggling to haul itself to sustainable growth? Officials at China's central bank have begun to call for a fundamental change in strategy, warning that interest rate cuts have become an increasingly blunt tool REITs Fight To Maintain Key ‘Real Estate’ On Their Chart After breaking out of a massive cup-&-handle formation last month, REITs have returned to test that breakout level August 23 Nasdaq 100 Index ETF QQQ: Ultimate Bull Battle Zone? We re testing a Major Support Trendline that started back since November 2008! Financial Sector (XLF) : Near Major Breakout? Since July 14, the XLF ETF traded in a narrow range and kept trying to break a Major Daily Resistance Trendline that started back since May 31 2007! 2016 Investor Fund Flows Nothing Like Excessively-Optimistic 2007 Right now, the longer-term weight of the evidence remains favorable for risk-on stocks ETFs May Actually Make Weak Players Weaker I agree with that view that the market is zero sum when looking at dollar-weighted performance. BUT investors are known to be horrific market timers, regularly underperforming the return of the funds in which they invest. The Search for Yield and Emerging Markets The global search for yield in 2016– not an improvement in EM fundamentals – is what has been driving the EM rally this year August 22 SP500 Index: Steady and Puzzling Markets? But the most interesting technical factor is that the Daily Ratio (SKEW to VIX) is now at one of the highest level since 2013 SP TSX60 Index (XIU ETF): Back at the Support Zone? But the most interesting technical factor is that we are testing back that previous breakout trendline Investor Complacency Is Smashing Records Near-term volatility expectations are currently on a stretch of unprecedentedly low levels Stock Rally Is Based On More Than Just Central Banks The Citigroup Economic Surprise Index tells us the economic data has also improved since June 27 What the New SEC Money Market Fund Regulations Mean for the Financial System On Oct. 17th a new SEC rule finally comes into play that will affect money market funds and liquidity across the financial sphere The Buffett/Munger Investment Checklist When investing, we view ourselves as business analysts—not as market analysts, not as macroeconomic analysts, and not even as security analysts.”—Warren Buffett, Letter to Shareholders, 1987 Money markets deliver stealth rate rise even as Fed stands pat Corporate sector is ‘facing the effects of back-to-back hikes,’ says David Kotok August 2016 Vice Index: Is Vice Spending Slowing? The Vice Index indicates a sharp downturn in retail spending… beginning in the fourth quarter (October) August 18 Emerging Markets (EEM ETF): Relative Breakout? But the Real Major Reversal will be when we finally break the downward channel on that ratio that started back in October 2010. We are testing it now... The Energy Sector (XLE): At the Resistance Zone? Now, the XLE ETF is getting back testing the Resistance Trendline of that Rising wedge
Index trackers: The good, the bad, and the ugly Just remember the type of index tracker you plump for is one thing – but the index being tracked is a separate matter Incongruent Logic To Balance Risks Leads To Incongruent Markets With Nothing But Risk The issue is entirely the dollar, or more precisely the “dollar.” Can Broker Stocks Finally Get Past The “2-Step”? One of the few sectors that has shown little inclination to participate in the equity rally – broker-dealers – has an opportunity to gain some traction here CBOE launches twitter tracking benchmark i ndex What Happens When Central Banks Become Major Buyers in the Stock Market? Case Study: Japan As for shares held in BOJ-owned ETFs, we have doubts that shareholder voting rights will be exercised properly by the asset management companies holding those rights August 17 First Real Test for Dividend Yield Chasers? The Federal Reserve still undecided on further rates hikes just provide enough uncertainties to bring finally a consolidation phase within the the Yield Chasers Investment Sphere SP100 Index ETF OEF: Generals too Confident? The Volatility of the SP100 Index (CBOE V XO) is falling faster than the Volatility of the Mighty SP500 Index (CBOE VIX) on daily relative basis since February 2016 as shown by the third chart below. We are noe on the Support Trendline that started back since June 2014!
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