• Warrington – The return of Volatility

    | | volatility, Yield Curve

    Volatility returned to the S&P in August. While multiple sources were responsible, the most obvious catalyst was the escalation of the trade war with China.  Just one day after the Federal Reserve indicated that U.S. monetary policy would be responsive to further trade war skirmishes, President Trump provided justification for further policy easing when he tweeted to invoke additional Chinese tariffs.  Later in the month the Chinese retaliated, and Trump responded with more tariffs.  The net result of these actions, which also caused a huge rally in bond markets, was a dramatic increase in market volatility.  The S&P rallied or declined by 1% or more on eleven separate days in August, the most in one month since February 2018, and the index had three separate days with declines over 2.5%, the most in nearly eight years … Read more Warrington – The return of Volatility
  • AG Capital: Fade to Famous

    | | Commodity Trading Advisor, Gold

    There’s something about being quoted in the Wall Street Journal or making it onto Bloomberg TV that often leads to terribly inaccurate judgement calls (at least in the short-term). A classic example of this is Ray Dalio’s famous interview from Davos in early 2018, where he declared that “If you’re holding cash, you’re going to feel pretty stupid” just before the market cratered -12% and potentially may have begun a topping process for the entire bull market run from 2009 … Read more AG Capital: Fade to Famous
  • Breakout Funds – Toxicity

    | | Macro

    Last night was a great chance to opportunistically be long of risk, short the long end of the curve.  We got some incrementally positive news on the China front on the Europe open and, risk pushed higher, and steepeners were put out.  Bears were sent scrambling to wait for the grownups to come back from vacation … Read more Breakout Funds – Toxicity