Guns N’ Roses released their first debut album titled “Appetite for Destruction” in July 1987. Three months later one of the most violent and unexpected equity market corrections in US history occurred. The Dow lost 22.6% of its value on Black Monday, and the causes behind the dramatic fall are... Show More
Over the past 12 months, a common headline in the financial pages has pointed to record low levels of volatility, as measured by the frequently quoted VIX volatility index. Yet for Australian equity investors, increasingly volatile share price movements in many stocks belies what the VIX is actually indicating -... Show More
Last week we saw BWX, BKL, A2M, WTC, NCK, NAN and BIN all up 7% or more. BAL is up 85% in three months, A2M is up 83%, WTC is up 55%, BWX is up 28%, BLA is up 46%. The mid-cap sector is having a dream rally. A lot... Show More
Implied volatility is now trading at record lows across a variety of asset classes, especially in US equities. This means that option markets are priced in the belief that the economic and political outlook in America and the world is as stable as it has been for more than 25... Show More
Equities are in the late stages of a near-record bull-market, and rates are once again heading up. In this exclusive interview, Arik Star, Portfolio Manager, Ellerston Global Investments, identifies the key risks in this environment. He also points out that in any given year there will be stocks that have... Show More
It is widely acknowledged that the outlook for economies and markets is unusually uncertain, given the huge political changes that we are witnessing globally. It is also widely acknowledged that most assets are expensive and priced to offer sub-normal prospective returns. Why then is volatility (the VIX) so low? History... Show More
Bloomberg has published five charts that give some reason for investor caution, starting with the significant divergence between VIX and gold inflows: “Gold inflows have not been matched by movement in the VIX, and a gap has opened up between the two measures. “While stocks and corporate bonds have rallied... Show More
US volatility index has come down to current levels five times in the last decade. Every time the market ran into short term profit taking cycle with rising volatility. Show More
What a difference a few days makes, only last Thursday we pointed out that US stocks had moved less than 0.5% for 9 consecutive days, but warned of a potentially large move ahead due to all the geopolitical risks on the horizon. This concern has played out in dramatic fashion... Show More
The Volatility Index (VIX) has risen marginally over the last few years and has proven very capable of spiking to extreme levels very quickly as we witnessed last year over China growth concerns - see chart 1 (Below). However volumes of the majority financial instruments have collapsed over the same... Show More
Comparing US market performance to 40 year historical trends > high risk of profit taking in early April before the bounce in late April. Show More
Equities have rallied very strongly from their mid-February lows when economic pessimism ran way ahead of itself leading to a significant market correction. The US S&P500 corrected exactly into our 1800-1815 target area from where it has now staged a very impressive 9.4% rally; amazingly, we are now only 7.8%... Show More
This fear poll published on the vix and more blogspot attempts to get some insight into which issues have been responsible for bring fear back into the investing equation and in so triggering the highest VIX spike (53.29) outside of the 2008-09 financial crisis and the #5 and #6 one-day... Show More
With the volatility index (CBOE VIX) hitting highs last seen back in 2011, the VIX index is up about 157% in the space of a week. We looked at the VIX back in March 2015, and came to the conclusion, due to practical methods of trading the VIX for Australian... Show More
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Good Morning, Show More
Good Morning, Show More
All quiet on the trading floor, as stocks sit just below all-time highs - Saxo Capital Markets Australia Trading Desk brings you the latest in Australian markets: Trading activity has been quiet as it has been in recent sessions. With a lack of news and stocks sitting below all-time highs,... Show More
Diverging trends in volatility. Currency wars and QE have been fueling equity market valuations. The increased level of activity in central bank rate policies has seen the interest rate volatility index peak in early 2015. Interestingly, this trend is divergent from equities volatility which is heading to the levels of... Show More
The year of the Boiling Frog. This article examines the rising risk in asset markets from the perspective of our return forecasting framework. We conclude that valuations in key markets are stretched, future returns are diminishing and the risk of loss is high (uncomfortably so). Now is the time to... Show More