Road to Nowhere

Posted on Feb 3 2016 - 4:57pm by Sharpe Trade

Markets are going nowhere.

Actually let me be more specific.

Risk is going nowhere.

No, I am not predicting market direction. I’m talking about the past. I’m talking about the appetite for risk by the markets for over a year now. While I may adopt a ‘bullish’ bent on the markets for a 10 day periodicity now and then, the last year in the markets have painted a very clear story. In December 2014, we were trading at about 2080 on the Spoos. Fifteen months later, we are at 1912. Bonds, post-taper, have remained elevated or simply headed higher.

S&P 500 Index
Last 14 Months


Japan.  Oil.  Negative interest rates.  China.  The Fed.  Equity valuations.  Come up with whatever narrative you want.  But price is telling us a very clear story.

The relief rallies should continue to be wild, and brief.  However it’s best to be flat on ‘risk’, or hedged.


So yes, while I may play brief rallies from time to time, on a longer term basis, I’m more bearish on the longer term.


Because that is the road the market has been traveling for the last 15 months …

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