Good News Is Good News Again… But It’s Not Good Enough
Traders got the good (or, at least, not completely terrible) jobs and retail numbers they’ve been craving, as data came in more or less in-line with expectations. So why am I inclined to bet against the consumer or, to put a finer point on it, the consumer’s discretionary spending? After all that’d seem counterintuitive right…
Watch Out - This Is the Next Thing That Could Tank Stocks
I know what you’re thinking, and no, we’re not out of the woods. We’re still under the influence of volatility, so consider any rally a rip-your-face-off rally until proven otherwise. The risk/reward picture still favors downside - heavy downside. Now, I can hear you saying, “But Doooon - what about CPI today?” Well, you’d think…
The Right Sectors Are Leading Now, But…
It might feel like the Japanese yen carry trade blew up 100 years ago, but trust me - it’s only been a week or so since the dam broke. If it feels longer than that, it’s because stocks have managed to squeeze much higher from last week’s yen-induced lows; short-sighted traders have already forgotten. This…
Stagflation Lurks Ahead of This Week’s Data Release
The market is convinced the Fed is satisfied with its inflation effort and is preparing to cut interest rates. We’ll gauge the reality of those expectations this week with a heat check on PPI and CPI data. The “$64,000 Dollar Question” is: How is the market positioned? If today’s action is any indication, it’s positioned…
Volatility Is Here to Stay
Mr. Toad took a wild ride this week… only to end up just about where he started. Massively unchanged. Volatility has collapsed back down toward 20, but don’t think for a second that that means the fun’s over. I’m going to show you some hijinks in the bond market that point to even more turbulence…
The Defensive Sectors and VIX Have NOT Given the All-Clear Signal
The market has been a rollercoaster lately, with the resilience of defensive sectors and the modest bounce in the technology sector painting an intriguing picture. This movement hints at a temporary adjustment rather than a full-blown recovery. The VIX, still holding strong above 22, reinforces this idea and suggests we might be on the verge…
How to Stop Worrying and Learn to Love Volatility
Sure, the VIX is down from the other day’s damn near historic high above 65. But it’s still more than double what it was just a month ago. Then again, there’s more than one way to measure volatility. And it’s not like volatility is a bad thing, at least if you’re ready for it -…
I Was Right About This Week’s Huge Downturn
Well, it’s finally happened. I’ve been warning for months - since it was cooler outside - that the carry trade in increasingly expensive Japanese yen was likely to blow the markets apart. And wouldn’t you know it… the mad traders’ rush to unwind their suddenly-expensive yen carry trades has at last blown the markets apart.…
The Yen Carry Trade Exploded… And Contagion Is Spreading to the U.S.
Sunday night’s headlines were unsettling as an onlooker - you could watch the carnage erupt in big Asian markets like Korea and especially Japan, where the Nikkei just had its roughest session ever. So I knew even then it would only be a matter of hours before the carnage jumped back over the International Date…
Game On! Volatility Strikes Back… and It Strikes Hard
It looks like, after a long, long run of being upside-down, bad news is bad news again… Not-great jobs numbers are pointing to an economic slowdown; crude oil prices are actually pricing one in. Bond prices are in full-on “duck-and-cover” mode.” Second-quarter earnings have been kryptonite for tech stocks. Investors are getting a rude awakening…