Macro - Risk is Very High
Updated
Idea for Macro:
- Credit Cycle turned down from top of Risk Range.
- Global Credit Impulse negative, US Systemic Liquidity Flows turning down, Fed Balance Sheet 5yr avg. at top of risk range.
- Demand-push Inflation at top of risk range, in 40 year downtrend.
- Implied Volatility vs. Realized Volatility reaching a critical level.
- PC ratio reaching low levels (signals investor complacency).
- SKEW at an ATH. Perceived Tail Risk is at an ATH.
Speculate a correction in equities this Summer, then a large correction EOY-Q1 2022.
GLHF
- DPT
- Credit Cycle turned down from top of Risk Range.
- Global Credit Impulse negative, US Systemic Liquidity Flows turning down, Fed Balance Sheet 5yr avg. at top of risk range.
- Demand-push Inflation at top of risk range, in 40 year downtrend.
- Implied Volatility vs. Realized Volatility reaching a critical level.
- PC ratio reaching low levels (signals investor complacency).
- SKEW at an ATH. Perceived Tail Risk is at an ATH.
Speculate a correction in equities this Summer, then a large correction EOY-Q1 2022.
GLHF
- DPT
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Reminder:Should the deep correction across asset classes occur, Bonds are typically the first to recover, then Gold, then Stocks.
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Risk Indicator flashing warning, not sell yet.Risk Model suggests possible Long VOL signal:
- Tech shows possible reversal patterns:
- Low Market breadth in tech rally, bearish divergences.
- Lumber, Gold, Copper, commodities signal reversal.
- Big VIX call flow.
- Yields and DXY suggest sell.
- Only Oil seems to be holding up markets.
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Watch for global markets and futures red in the pre-market for a red flag.Trade active
Financial sector gives a signal: 
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NQ confirms the clean short entry: Let's see if there is continuation
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EM's beginning their interest rate hikes. Global risk appetite decreasing.Trade active
China Credit Impulse 12M change again dropsTrade active
This is relevant news: wsj.com/articles/credit-suisse-turns-away-from-softbank-and-its-founder-masayoshi-son-11624021118?mod=e2twCS backed off lending to Softbank. Softbank is basically Cathie's ARK but for QQQ.
Easy money is ending.
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Fed Balance Sheet YoY % drops off,Fed raises RRP rates and overnight RRP shoots to nearly
1T,Margin debt at ATH,
Global credit impulse now negative...
The market will continue to rise. How? Where is the money coming from?
The rally up till now had been fueled by easy lending, but the Credit Cycle has turned down. Liquidity flows are decelerating and being pulled out of the system.
Who now will bid up the assets bought at these lofty heights?
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RRP skyrocketing. It's simple. Bank Reserves > Credit > Equities. Liquidity outflows lead market movements.Trade active
SKEW typically frontruns big moves by a month or 2: SKEW rises as a result of big players with inside knowledge of a catalyst coming.
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US Credit (Junk + Leverage) rolling over: Disclaimer
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