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Risk on Trade suggests Risk Off ahead?

thetrader's picture




 

By www.thetrader.se

 

The markets started this year with the risk on trade. Silver and Gold dominated the bull run, tightly followed by some equity markets such as the Indian Sensex. It has been a climb of the famous wall of worry, but still, it is a great bull continuing to dominate, or? Both the precious metals have turned much lower compared to the high levels we saw earlier this year. Ok, no problem, the equity rally is still doing well. Yes, it is, at least the DAX is the new “leader”, but the emerging leader, Sensex, has not taken out new highs. On the contrary, the market is downsome 6% from the highs we saw in mid February. If Silver, Gold and the Sensex showed the risk on trade until mid February, maybe the relative underperformance of the risk on trade is showing weakness ahead?

Charts below.

Dax blue, Sensex green, China black, SPX red.

 

Silver, Gold and Sensex, all losing ground.

What if the summer of 2012 will prove to be another stormy summer? Possible scenarios here.

 

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Tue, 03/20/2012 - 10:33 | 2273065 New American Re...
New American Revolution's picture

A wild summer?   Sell in May and go away?   G8 moved from Chicago to... CAMP DAVID???   Something must be going on and inquiring minds want to know.   How about a looming U.S. Bond wreck for the tip of the iceberg?    Hmmm,... I wonder what's just beneath the waves?

http://feeds.feedburner.com/blogspot/hMcSw 

Tue, 03/20/2012 - 08:27 | 2272674 Fuh Querada
Fuh Querada's picture

Sensex?? Thought it was a condom lubricant

Tue, 03/20/2012 - 10:03 | 2272974 wombats
wombats's picture

Also works well as motor oil.

Mon, 03/19/2012 - 19:41 | 2271335 GovtMediaLiars
GovtMediaLiars's picture

Yes but here in the US the change recently has been from an underperformance of small caps and high beta to a building trend of outperformance. A very positive sign if this rally is going to continue and indeed, something that we needed to see if it is going to continue. I switched my bearish view of the small caps out for a more positive view starting after the first week of March, when technicals turned around sharply for those classes. RUT and SOX look primed for relative outperformance if the rally continues.

Then again, this thing seems just a tad overextended in so many ways. 

Cheers!

Mon, 03/19/2012 - 18:48 | 2271175 Zero Govt
Zero Govt's picture

informative

i like outlines of Lego, reminds me of kindergarten, a great place to start to throw a few hundred thousand at the risk trade

Mon, 03/19/2012 - 18:44 | 2271169 Bartanist
Bartanist's picture

I find the terms "risk on" and "risk off" absurd and offensive. What we are really atlking about is "manipulate up" and "manipulate down".

Mon, 03/19/2012 - 18:58 | 2271209 HD
HD's picture

"What we are really talking about is "manipulate up" and "manipulate down"

 I just realized central bankers and porn stars have the same job description...

 

Tue, 03/20/2012 - 04:49 | 2272473 Zero Govt
Zero Govt's picture

i'm not sure there's a 'risk-on' or 'risk-off' mode ...i think the market (price) is a point of robbery that sucks in longs and fleeces them, sucks in shorts and fleeces them

they say 95% of stock pickers lose money but if the other 5% who make money are actually brokers and other market makers then the risk is 100% you're going to lose money

Tue, 03/20/2012 - 09:01 | 2272765 Shizzmoney
Shizzmoney's picture

they say 95% of stock pickers lose money but if the other 5% who make money are actually brokers and other market makers then the risk is 100% you're going to lose money

This sounds like 99% of most professions today, minus doctor/lawyer/trashman.

Tue, 03/20/2012 - 10:06 | 2272980 wombats
wombats's picture

Did you notice the trading volume reports that ZH has posted?  who wants to play in this rigged carnival game?  Much better odds in Vegas or Monte Carlo.  At least somebody is watching the game and somebody is watching the watchers.  They actually make more than a pretense of preventing fraud.

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