Posts Tagged ‘ volatility suppression ’

No Man’s Land

October 5, 2016
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No Man’s Land

an anomalous, ambiguous, or indefinite area especially of operation, application, or jurisdiction definition two: financial market direction over the 2015-2016 period The meandering, low-volatility, sine wave oscillations of the tape continue. How did markets arrive at a point where a 3% pull-back is petrifying, and a 5% pull-back feels like a crash? The Brexit pull-back in June, was just about 5% on the nose, but it lasted only 2-days. Policy maker support of markets , vis-a-vis central bank actions, and ultra-low interest rates, stumble upon the end of the rainbow. Now what? The pressure on the Fed to assert its independence from politics, specifically the democratic party, is rising. Last week, Janet Yellen short circuited (in this clip) when confronted by Representative Scott Garrett of New Jersey. Donald Trump,...

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Volatility Suppression Challenged

September 12, 2016
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Volatility Suppression Challenged

Since the BREXIT rebound/rip, it’s been an exceptionally stable summer. Few predicted that the unexpected BREXIT vote, would be an unequivocal positive to markets. The tell, quite clear after the fact, was the global rate plunge, and the US 10-year yield sinking to the 1.35% range, around the 4th of July. The perfect combination arose to send markets to all-time highs during the summer, a scary event (BREXIT) that lowered global rates, took the Fed off the table, and led to stimulus as far as the eye could see in Europe/elsewhere, all while not really impacting the US economy. As long as “lower-for-longer ” (interest rates), a BREXIT residual, remained in-play, volatility suppression reigned, and equities could grind higher. While the dynamic persisted all summer, it came undone the...

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