“Why should I apologize for the monster I’ve become? No one ever apologized for making me this way.” – The Joker
Yes, it’s a Batman kind of day…Today’s thought of the day make us think of the markets because indeed, the markets are really extended and are moving in a very unnatural way compared to historic norms. We all know the dislocations that the Central Banks have created but sooner or later something will have to give.
Riddle me this: how long can high yield continue to puke as equities continue to make new highs? As we have said before, you can run but you can’t hide, sooner or later the unwind will come… don’t forget to keep an eye on internals, breadth doesn’t lie.
To be clear, we are not looking for an ‘end of the world scenario’. Any decent correction in equities will likely be an interesting buying opportunity. All we are looking for is to see some healthy two-sided action back in the markets. We are looking for some volatility to come back into the picture to shake out complacent players and open up more opportunities.
It’s good to see that the FinTwit crowd has started to pick up on our discussion on breadth and sector divergence. Naturally, this doesn’t mean anything in terms of coming moves but it is good to see more participants noticing that this market is not ‘crack.free’.
We will continue to post updated charts on Twitter.
As always, there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.