Market Intelligence

China up, Volatility down, Credit up, USD down

Author: Aleksandar Adamovic November 16, 2018

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CSI 300 continues to push higher. We have seen the index climb over the past weeks. Maybe a small consolidation here as we are flirting with the negative trend, and then a proper breakout attempt higher? Watch the 50 day that is possibly looking to start sloping positively.

 

 

Another important index, often overseen, is the Shanghai property index. This index is breaking above the negative short-term trend and is currently putting in a big break out candle.

 

 

08:30:27 Odd decoupling Spanish vs Italian “relationship”

 

 

Not as spikey as on previous occasions, but the put-call ratio remains relatively elevated. Big spikes in put-call ratio have been local lows in SPX. Let’s see how this one plays out.

 

 

Note that iTraxx trades close to “panic” levels we saw in late October, while the V2X has come down from 24 to sub 20. (V2X still pricing approx. 1.2% daily VG1 moves.)

 

 

Have not seen this in a while, but credit really underperforming VG1. Chart of iTraxx (inverted) vs VG1. Credit has gone from “not needed to very needed” in a weeks’ time.

 

 

US 10 year below the 50-day average, have not closed below it since Aug. Double top? The big level here.

 

 

DXY index vs net non-commercials…another crowded trade about to blow up?

 

 

China – FXI US at massive downtrend here. This space has been very stable and strong lately. A close above that trend and things can get interesting…

 

 

iTraxx up 2.5% on the day, V2X down 10% on the day. Note the recent “dislocation” over past 2 days.

 

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