New developments:
Deleveraging — the monster slowly rears its ugly head.
A gradual, then classic “all-at-once”, regime change seems underway in global markets.
It first happened in Rates and then Currencies, as we’ve been discussing for weeks, and it has finally transitioned into Equities.
It’s early, but we are seeing more signals pointing to the risk of a widespread liquidation into later Q3. We’ll cover them throughout today’s post.
Leverage creates instability, and crowded positioning remains extremely vulnerable to a Volatility shift here.
Upside Alpha is turning into downside Beta — evidence strongly suggests Short Momentum could begin to work, for the first time in more than a year. We’ll cover those signals today.
Further evidence that Stocks are on the other side of their Blowoff — and selling bounces MAY work for the first time in a year.
No bounce has been seen yet — a concerning behavior, similar to other historic reversals, as discussed earlier this week (here).
IF a bounce develops, look for these key signals in order to increase conviction on the Short side — which we’ll cover today.
Bull Trap failures are triggering across the board. Let’s weigh the evidence.
If these failures are confirmed, the risk of a Correlation-1 decline could be significant.
Gold, Gold Stocks, Silver, Platinum — a clear downside reaction, after sharing my concerns earlier this week (here). Something very important is happening — which many seem unprepared for.
Rates, the Yield Curve and the Dollar tracking as expected.
Dollar-Yen, the best FX trade in years — the setup is still developing, watching next week closely. Big picture: everything hinges on getting this sequence right, as I wrote here.
Japan Equities — no one’s watching, but they should (Part 2 — follow-up to last week’s key charts).
Bitcoin — surged from key support levels highlighted. Scenarios tracking as discussed — updating those today.
80 updated Charts & Commentary on all major Markets — for your weekend reading:
A quiet summer may become a hopeful memory…
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