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Fundamental analysis at its best.
i ran this on google finance and it looked like 3 skittles traveling down the rainbow holding hands
all i had for lunch was a salad (yea yea, the lettuce username pun is not intended)... sweat tooth not fulfilled... can i get some of those SPY/DXY skittles please??
How about putting in a link to a full size image??
Agreed, cant even see the blue =\
I sent the SEC another letter on this very topic. I have been doing it for a few years now. It is a national embarrasment
Need larger image.
Can some one explain me what is this commoditization. What is the opposite of it.
tyler ... i understand your view that this is commoditization, but what i believe this truly represents is the flight away from risk and to safer assets (dollars and yen). if you follow this for the past several months, you will note that it is indeed the yen that is strongest (against everything else, incl the greenback) when equities fall (or, for that matter, when anything equity or commodity-related falls). the dollar is second in the fx world behind the yen in this circumstance.
likewise, when equities rise, the dollar falls against all except the yen. the yen falls against everything.
it's brilliant. it's boring. but it's definitely about a flight to and a flight from risk amongst all markets... this has been going on since late last year. it's cool to watch. it's also why gold never went too high above 1000 or to 1200 like many predicted during the crisis when equities tanked in march (spx at 666....wooooo).
think about it, though -- the USA is a net-importer of commodities. when the economy appears to gain strength here (e.g. equities rise), there is the secondary effect (as i would consider it) of dollar bearishness due to additional importing of goods (esp. crude)... the costs of those goods rise as a result, further dollar deterioration, lovely spiral...
The correlation is way too tight, sorry. While your argument seems compelling, I disagree. Europe would be in the tank if that were true as a ne timporter
i am only adding the import/export effect as a secondary effect... the true issue here is the flight-to-quality and shunning of risk (or the opposite when equities rise).
you can't argue with the facts...just look at yen, dollars and global equities for the past 8-10 months :)
Tyler is showing that the SPX is essentially like a commodity. Commodities tend to trade with the dollar. The SPX is now, no different than copper, or oil.
It makes zero sense on any level that the SPZ should derive their value from the Euro.
Isn't there a more logical and fundamental way to value the wealth of the nation's largest public companies??!!
That's the issue.
It is all a big trading program and we are puppets on a lowly string...Charlie, report that and you might get some cred.
one asset missing... aapl.
I currently hold a significant silver position to hedge for where we're going in the years that come, and I'm becoming more and more perplexed at how lock-step gold (and silver) has been with the S&P in the last couple months. God knows what lies ahead.
If you have faith that those who are in charge of the nation and it's markets are highly trained professionals who are only motivated by the common good (AND have finally discovered that secret that escaped alchemists for thousands of years- the ability to turn paper into real capital wealth) then by all means, proceed as usual.
If you don't believe this is true, then gold and silver are to be bought. Plain and simple.
When people are gone it's good to know the machines will still have markets.
thank you for linking a chart which shows exactly what i was trying to say above ;) this began when risk aversion became the new black.
this has nothing to do with commodities or something of that nature...this is all about risk and the desire or lack of desire for risk. look at interest rates and the perceived quality of certain forex assets... carry trades, anyone? hello hello?
there is only one small issue with your argument, otherwise it is very compiling. If there is a flight to safety, why then all of the craps (high beta & 0 OCFs) outperforms FUNDAMENTALS? Why the market goes ONLY up and everyone is re-leveraging? You ether have the green shoot or the flight to safety, you can't have both. That's why the whole picture in the last couple of months smells fishy.
p.s. Do you like fish sticks ? (no pun intended)
SPY up, USD up, VIX up, VXX down. Error. Does Not Compute.
A strange game. The only winning move is not to play. How about a nice game of chess?
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