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Tuesday, February 3, 2015

Two trends have ended


I think the January US equity market was driven by two big forces. This:


was making everyone freak out about the small portion of high yield debt in the oil world while underestimating the benefit of lower oil prices to other areas of high yield.

Also, it was making them grossly overestimate the importance of oil production to the US economy and grossly underestimate the benefit of lower gasoline prices.

And it was making everyone worry about a worldwide deflationary collapse.

Now the trend is reversing.

And this:


Was making everyone dump internationally-exposed US stocks, and making them freak out about a coming economic collapse due to a higher dollar.

That trend looks like it might be stopping too - or, at least, it's not unreasonable to expect that two hyperemotional narratives could come to an end at the exact same time.

And that still has me concerned about this:


Because you'd have to think that at least a part of the buy volume in gold has come from stupid white-ass honky crackers from Wall Street who have been wetting their beds over the USD and oil stories.

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