Trading trend reversals

The Market Ear Picture

Keep it simple

Selling trend lines... Both SPX and the TYc1 futures reversing perfectly.

Source: Refinitiv


Bond vs equity volatility

The MOVE vs VIX ratio has moved higher recently. Dominic Wilson's idea is that equities just need some rates stability (ie lower MOVE) to continue to perform. "...for equities you probably just need to have more stability". Watching the MOVE closely going forward, especially post today's price action in rates.

Source: Refinitiv


Oil fear not buying it

The gap between oil volatility, OVX, and the VIX is very wide.

Source: Refinitiv



Albert Edwards: "Semiconductors last saw this surge just prior to Nasdaq collapse…and sales levels aren’t currently supporting high IT inventory".

Source: Soc Gen/JPM


Stretched Tech

S&P500 Tech relative (chart 1). MSCI World Tech 12m forward. P/E relative (chart 2). S&P500 Tech relative and US 10Y bond yield (chart 3).

Source: JPM


Source: JPM


Source: JPM


IWM call mania

Small cap call open interest has exploded to the upside. Russell volatility is well bid and with skew at 10 year lows, GS derivatives desk thinks call spreads are attractive as you take advantage of relative elevated upside volatility (and is a cheap way to hedge Russell shorts).

Source: GS


Small cap zombies...

...are many.

Source: Soc Gen


Bankruptcy bull

US Bankruptcy filings, by year.

Source: S&P Global


The bitcoin surge

JPM's position proxy based on open interest in CME Bitcoin futures contracts has seen a huge move higher.

Source: JPM


See TME's daily newsletter email above. For the 24/7 market intelligence feed and thematic trading emails, sign up for ZH premium here.