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Monday, January 5, 2015

On US market perspective


Cam Hui - the panty-piddling little girls are back at their desks.

He notes that the US market looked bad on Sunday, and guess what? It looks worse now.

Here's the SPY right now:


Yup, that's a rollover. And $VIX has popped over 20, $VVIX is 120, and hey look at this term chart from vixcentral:


Yup, it's inverting!

So OMG everything is horble, right?

Well, look at the above SPY chart, then look at this:


Yup, in Canadian dollars it doesn't look so bad. This might still just be setting up for a retest of the early December high. Hey, the mid-December puke doesn't even look that bad.

Hey, look at IWM:


Still no more than a retest of the breakout, so far. And here I was wanting to lighten up my position in XSU.to! Then I looked at the price and said "hey, that's not bad for a $VIX of 21! I think I'll hold."

So maybe the adults are back at their desks. But they're puking broad equities because they're scared of the USD pop, they're puking energy at the continued weakness in oil, they're puking junk debt because oil again, and thus they're buying downside protection becuase of the volatility, and they're puking XIV whose position is half of the near futures' open interest, and thus we get this big wobble.

Meanwhile for us in Canada, this is still just a minor breakdown in US equities and nothing really worth selling.

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