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Killer Bunny
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yes but death cross/golden cross etc would have said the same thing in 2011 also.

If you were to use them as sell/buy indicators ofc then SPX has been on a "buy" signal for last 6 weeks or so. i.e. it is in a "bull" market.

I (also) wouldnt trade them but worth being aware of as you say.

Edit: To add volatility/whipsaws obviously also a significant factor in underperformance of momentum systems last 12 months or so.

Edited by R K
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So very near term this retracement looks like blowing over within 2-3 days. But this increase in volatility events is becoming a right pain in the ar5e.

#foolcast

Market activity since Monday suggests (to me-proprietary etc) near term capitulation may extend now into next week. As usual at these turning points (based on prior occurences) the longer they drag on the increased probability of an unpleasant cascading price collapse/dislocation/spike in volatility.

#foolcast

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Market activity since Monday suggests (to me-proprietary etc) near term capitulation may extend now into next week. As usual at these turning points (based on prior occurences) the longer they drag on the increased probability of an unpleasant cascading price collapse/dislocation/spike in volatility.

#foolcast

And here we go........China limit down, yuan depreciation fear et al.

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Market activity since Monday suggests (to me-proprietary etc) near term capitulation may extend now into next week. As usual at these turning points (based on prior occurences) the longer they drag on the increased probability of an unpleasant cascading price collapse/dislocation/spike in volatility.

#foolcast

Better volatility today may bring it a little closer again......swing low perhaps as soon as tomorrow/Monday depending........

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China have suspended their limit down circuit breaker so lets see what impact that has tonight.A

All we need now is Al-Naimi to change his tone (in public at least) and we could be back off to the races.....

Edited by R K
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Some positive thoughts about China:

"Domestic stock markets in Shanghai and Shenzhen, which soared during the first half of last year, partly in anticipation of foreign investors being allowed to invest in them, have proven vulnerable to swings in sentiment and bouts of selling ever since. A lack of liquidity in these markets this week caused a spill-over of selling into the more easily traded Hong Kong market too.

From a fundamental perspective, it’s unlikely that anything much has changed in China since the end of last year. We know already that growth has been slowing for some time, largely because the government is encouraging a shift away from lower quality, debt-fuelled investment towards a services-orientated, consumer economy. This means better quality growth, but a bit less of it."

"Market moves in Shanghai and Shenzhen this week have bought [sic] domestic shares back close to their pre-bubble levels of just over a year ago.

Moreover, the MSCI China Index, which covers around 85% of China’s investable universe of shares, traded on less than 10 times the earnings of the companies it represents at the end of November8. While that belies substantially higher valuations among hot “new economy” stocks, it represents a sizable discount to world equities (trading on 19 times). Moreover, it suggests that, even before the market falls of this week, a good amount of pessimism about China’s future had been factored in."

More here

https://www.fidelity.co.uk/investor/markets-insights/investment-insights/details.page?whereParameter=investmentinsights/china-experiences-more-growing-pains

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Worst start to equity year... Ever.

But RK has been bullish for many months while equities have been trending down. Wake up people.

If you are incapable of reading (or quoting - a simple task) what I post & clearly have little understanding of volatility and as you put it would rather drink your own blood than own equities then I suggest you refrain from embarrasing yourself.

My posts are carefully worded and nuanced. "a falling 200ma is bearish" Im afraid is kindergarten entry level sort of advice youd expect to see from a first day on the job Daily Mail financial journo.& appropriate to the level of understanding of their readership.

Stick to your knitting.

Edited by R K
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2 year ylds coming back towards near-term low.

Very similar to Jan 2015 in fact.

http://stockcharts.com/h-sc/ui?s=%24UST2Y&p=D&yr=2&mn=0&dy=0&id=p21958705924

EDIT: With 10yr at just above 20 spread is still around 1.2 and a long way from a curve inversion. Usually signals the start of the expansionary blow off phase.

Edited by R K
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http://www.bloombergview.com/articles/2016-01-19/the-deeper-causes-of-the-global-stocks-rout

Financial markets are undergoing two consequential transitions, which not only amplify the impact of even the smallest developments in China and oil, but also increase risk aversion overall and create the conditions for more unpredictable devleopments.

The first has to do with the shift from a prolonged regime of repressed financial volatility to an environment in which such instability is higher and less predictable. The primary reason is that central banks are less willing (in the case of the Federal Reserve) or less able (in the case of the European Central Bank and the People's Bank of China) to act as suppressors of volatility. In the short term, this transition inevitably leads to higher risk aversion, deleveraging and lower portfolio risk-taking, especially affecting risk-based models and asset allocations that use volatility as a major input.

The second transition involves liquidity, and a move away from counter-cyclical balance sheets. Facing tighter regulation and sharply reduced market appetite for short-term earnings deviations, broker-dealers are a lot less willing to take on inventory when the market overshoots. Other pools of capital, including sovereign wealth funds, also face constraints in increasing their risk-taking.

Left unchecked, these two transitions would feed each other, accentuating the general sense of financial instability and insecurity. The longer this continues, the greater the volatility and the bigger the threat of adverse consequences for economic and corporate fundamentals; and the higher the risk that the instability could then spill back onto financial markets, fueling a destabilizing vicious cycle of economic and financial dislocations.

The good news is that such dynamics ultimately exhaust themselves. Unfortunately, that only happens after a lot of volatility, accompanied by a heightened risk of very sharp and disorderly declines in financial asset prices as well as contagion. In the process, that turmoil has a contractionary influence on corporate and household spending, slowing economic growth.

A much better resolution would be if improving fundamentals could support and validate financial asset prices, which also would provide the context for the productive engagement of the large amounts of cash now held on the sidelines, whether on companies' balance sheets or in excess household savings. Policy adjustments will be needed for this to occur, and, this time, the response cannot be the sole responsibility of central banks in general (and the Federal Reserve, in particular).

Indeed, even if the Fed were to resort to a new program of large-scale securities' purchases ("QE4"), the measures' economic effectiveness would be in great doubt from the outset unless they were accompanied by pro-growth structural reforms, more responsive fiscal policy and the removal of entrenched debt overhangs.

Neither of these outcomes is preordained. What happens next depends on choices that will be made in the weeks and months ahead, particularly by politicians who, through inaction and partisan bickering, have placed too much of the policy burden on central banks for far too long.

Edited by R K
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Media commentator contra-indicators abound but this one is as good as any other

Paul Mason @paulmasonnews 45m45 minutes ago

As 3rd boom-bust cycle gathers momentum, this time it’s different. Unfortunately. Blog: http://blogs.channel4.com/paul-mason-blog/governments-tackle-unsustainable-global-economic-trends/4336

CZPZUSEWcAAGjC9.png
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