"Fasten Your Seatbelts" - UBS Warns Of "Record Spikes In Volatility" If This Level Breaks
Having warned earlier in the week of the potential for a significant crash in US equities and the appeal of owning gold, UBS goes one further in their recent report warning of "record spikes" in volatility should the following levels break...
Generally, the late September bottom in equities has an absolutely pivotal character for a lot of markets. In Europe, the September low represents the 2009 bull trend. In the Russell-2000 or the MSCI World, it is the neckline of a huge head & shoulder formation and in the S&P-500 it is an obvious double bottom, which would be negated as well as breaking the 32-month moving average.
Analytically, this moving average has a very good track record in signaling whether the US market is still in a bull market or not. Even the 1987 crash was just a pullback and mean reversion to this moving average, whereas in 2001 and 2008 the break of the 32-month average was confirmation that a real bear market had started.
So regardless of when we get this signal, a break of the late September low at 1867 in the S&P-500 would be the ultimate confirmation that the US market is also in a real bear market and in this case we would recommend to fasten your seatbelts.
If we look into the macro world we are obviously living in a world of extremes. We have record debt in the Emerging Market complex, in Europe, in Japan and in the US; with margin debt in the US at record levels, M&A hitting record levels, record ETF holdings in corporate bonds, record auto loans in the US, and the list continues.
We would be surprised that in this highly leveraged world, in combination with a structural decline in market liquidity, a 7-year cycle decline would just be mild. We think it’s actually just the other way around and in this context we see last year’s rise in volatility as just the start of a period with exceptionally high volatility where we wouldn’t be surprised to see record spikes in volatility over the next 12 to 17 months. So another key call we have for the next 12 to 15 months is to be long volatility.
Particularly with regards to the ongoing bear market in high yields, we think that volatility in equities is too low and this will be one of the key charts for 2016.
Last year we argued that we generally see all these divergences as a leading indicator for an important top in global equities. 12 months later we are in the next phase of the global rolling over process, where we see more and more markets having already fallen into a bear market, and where on the other hand we can clearly say that without a new momentum impulse coming from the fundamental world the air for the remaining outperformer markets will get increasingly thin.
Source: UBS
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Chats don't matter. The is only P & P. Print and propaganda
Wa ha haa.... hello my precious...this shiny thing i love to look at
Wa ha haa.... hello my precious...this shiny thing i love to look at
Well did you think deflation was a myth like Bigfoot? Surprise ! Counterparty risk means.no soup for you. Catch 22 they bail out and get devaluing going or they do not and face defaults and collapse. Either way there's riots in China
Well did you think deflation was a myth like Bigfoot? Surprise ! Counterparty risk means.no soup for you. Catch 22 they bail out and get devaluing going or they do not and face defaults and collapse. Either way there's riots in China
Bigfoot is real, a product of Dr. ET Moreau's Dulce kitchen.
Smashing Pumpkins...Bitchez !111111111
https://www.youtube.com/watch?v=TPE9uSFFxrI
Sadly Muse singer has now stated he was wrong about 9/11 and belives the official story.
the "Official" government version of events-since when can you trust politicians to tell you the truth?
Might as well add some anarchist industrial for good measure.
KMFDM
Edit... oops wrong one. https://www.youtube.com/watch?v=on3WKwWJJPI&bpctr=1452574877
Sorry folks, but just like BAC, HSBC, and Douche-a-bank, UBS is the "stupid" money on the street. Treat them all just like Dennis Fartman, trade the opposite of what they recommend and you will make money.
RBS just said get out of everything other than quality bonds
Booyah!
Actually we are in 1929 setup.
The current debt is worse than the Great Depression-much worse. Scroll down past who owns or owes what and check out the massive derivatives that will begin to unwind.
http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in...
Me thinks the big banks are using the derivatives to accumulate the metals and tangible goods (possibly semi-tangible goods as ownership of companies and real estate). I would not be surprised that when the financial D-Day arrives, Obama will sign an executive order declaring all derivative contracts void and the banks are off the hook... time will tell how this pans out, but one thing is for sure... the average retailer and Joe/Jane on main street are going to get screwed one last time, screwed and deprived of everything. Good luck to all, we will all need it, soon.
I have been reading Galbraith's "The Crash of 1929."
It seems similar.
http://www.telegraph.co.uk/finance/economics/12093807/RBS-cries-sell-eve...
Cable & dish announced sports package $ increases, more cutters soon!
They sure say "we" a lot. There is no "we" mother fuckers.
Freeshitter
Same here born in 70... hit the door in morning and didn't come home till dark...totally different times today (obviously)
tell my 10 yr old girl , enjoy being A Kid ! doing my best to keep it that way!