FED/RESPPMA
When evaluating risk and determining sentiment, I like to look at the intensity and correlation. Trying to get intent out of bias is tough when you're talking about thousands of different traders and investors all making decisions for thousands of different reasons. It's more important to look at the correlation and volatility of moves to see if there is a common theme that is making price-action catalyze the way they are--and when they do. Looking at the !JPN225 (Asia) and the !DAX (Europe) and the Dow (U.S).
Looking at the Asian session overnight, we've seen a retreat across the board, with european market gapping to the downside with declines on both active sessions of Asia and Europe. The close for the session was $3,145, ending the day lower, rejecting the price of 3,181.94 as posted on Monday. I will point out there is some clear evidence of speculative skew; a prioritization oof momentum, not value. If you're looking for value, look at discounted assets, however you don't see this reflected in the SPX.
The DAX, which is a tech heavy index, can be compared to the FAANG index, can prove an easing this last session. The interesting thing about the concentration of speculative adhesion, where momentum overrides "value" or underlying fundamental principles-- there is a relative that even in U.S. equities that there is enough demand to support the risk-reward, even at these highs.
Looking at the SPX relative to the rest of the world, can clearly show that it's lagging. (SPX/VEU), while substituting the NDX/VEU proves there is a narrow path of speculative preference. Looking at the counterparts--the DAX, Dow, and Nikkie; the Nasdaq 100 isn't a great representation of this. These are the companies that remain in the headlines, so people continue to concentrate their bets, which is classic in nature and has happened throughout every depression in history. There will be balancing coming into the future, where things get a little more complicated. Where could a trigger be, at what price, and when--for such a broad environment? This is unpredictable, however when casting aside fundamental issues it's a bad approach and ripe with false flags and mis-priced valuations as the market's continue to try to pick tops and bottoms.
Looking at the Asian session overnight, we've seen a retreat across the board, with european market gapping to the downside with declines on both active sessions of Asia and Europe. The close for the session was $3,145, ending the day lower, rejecting the price of 3,181.94 as posted on Monday. I will point out there is some clear evidence of speculative skew; a prioritization oof momentum, not value. If you're looking for value, look at discounted assets, however you don't see this reflected in the SPX.
The DAX, which is a tech heavy index, can be compared to the FAANG index, can prove an easing this last session. The interesting thing about the concentration of speculative adhesion, where momentum overrides "value" or underlying fundamental principles-- there is a relative that even in U.S. equities that there is enough demand to support the risk-reward, even at these highs.
Looking at the SPX relative to the rest of the world, can clearly show that it's lagging. (SPX/VEU), while substituting the NDX/VEU proves there is a narrow path of speculative preference. Looking at the counterparts--the DAX, Dow, and Nikkie; the Nasdaq 100 isn't a great representation of this. These are the companies that remain in the headlines, so people continue to concentrate their bets, which is classic in nature and has happened throughout every depression in history. There will be balancing coming into the future, where things get a little more complicated. Where could a trigger be, at what price, and when--for such a broad environment? This is unpredictable, however when casting aside fundamental issues it's a bad approach and ripe with false flags and mis-priced valuations as the market's continue to try to pick tops and bottoms.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.