Waking Up a Bear

Posted on Nov 1 2016 - 2:36pm by Sharpe Trade

So we ended the month of October with a whimper, and are beginning the month of November by selling off -1.01% on the Spoos in the afternoon hours.

Interesting side-point to make on the overall state of ‘risk’.  Yesterday, as it was the end of the month of October, I began to look at the best performers, volatility adjusted, for the previous three months.  And what did I find at the top of the list?

Junk.

Literally … junk.  High-Yield was the single best performer, volatility adjusted, for the previous three months.  

dan-junk-high-yield-volatility-adjusted-best-performer-three-months-stocks-sell-off-sharpe-trade

Junk beat Gold, Stocks, Emerging Markets … you name it.  Even the front-end of UST’s.  At least it was yesterday.  Today, on an intra-day basis, junk is getting kicked in the … …

As I said then in the stocktwits stream, that alone ought to tell you something about the environment we are in.  We had stated on the Friday review video we were neutral on equity prices.  We are now sliding into a bearish view on a 3 to 15 day periodicity, here in the beginning of the month.  Longer term, we are still bullish on stocks …

1 Comment so far. Feel free to join this conversation.

  1. mappy November 2, 2016 at 11:23 am - Reply

    Well, Christmas came early. Oil getting cheaper by the second. No play for me today. oh well.

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