Contents
| Stocks | 1 |
| S&P500 | 1 |
| Bonds | 2 |
| 10 Year Treasury | 2-3 |
| Foreign Exchange | 4 |
| AUDJPY | 4 |
Stocks
S&P 500
| Ticker | Asset | Price |
|---|---|---|
| SPX500 | Index | 3172.7 |
The S&P500 is displaying some of the most bearish intra-month price action I’ve ever seen. In fact, if you go back more than 100 years you’ll have a hard time finding anything remotely similar. These rare types of wicks in the red circle usually appear in major reversals from lows, not from highs. The current price action is indicative of a major reversal if equities continue their decline.
Bonds
10 Year Treasury Bond
| Type | Asset | Price |
|---|---|---|
| 10 Year Treasury | Bonds | 130’31’0 |
On February 11: I published why the 10 Year Treasury is positioned to trade higher from here. Treasuries and stocks could trade higher together in the long term, but in the short – medium term, rising treasury bond prices are indicative of risk-off in the markets.
Foreign Currencies
Australian Dollar / Japanese Yen
| Cross | Asset | Price |
|---|---|---|
| AUDJPY | Forex | 70.928 |
On February 28 I published on twitter how the Australian Dollar was set to collapse against the Japanese Yen. The Yen is a safe haven currency and the Aussie is a commodity currency. Weakness in this cross could be indicative of global economic weakness.
Summary
Combining the recent violent weakness in US and global equities, weakness in risk-on currencies, and strength in safe haven assets like treasury bonds and the Yen, I think there is sufficient indication to be cautious in risk-on assets. Now is a very good time to either be in cash or have hedges on.
Thanks for reading!
Michael Maranslicht 