Wow! What a rally yesterday! Clearly, investors are beginning to see blue skies ahead, right?
Well, while we're not ready to sound the all-clear right here, I will say that the latest data that instruct our views are offering up some legitimate less-bearish signaling that we need to not hastily dismiss.
So, then, the question, was yesterday's rally any confirmation that maybe, just maybe, a bottom’s beginning to form? Did it, per se, support that "legitimate signaling" I'm hinting about? Well, frankly, by itself, nah...
Recall in our last two video snapshots me pointing to the heavy net short interest among those who speculate in SP500 futures contracts.
Here's the latest reading:
Asian equities rallied overnight, with 15 of the 16 of the markets we track closing higher.
Europe, however, is struggling so far this morning, with 12 of the 19 bourses we follow trading down as I type.
The VIX sits at 24.48, up 0.08%.
Oil futures are down 1.59%, gold's up 0.09%, silver's up 1.82%, copper futures are up 1.71% and the ag complex (DBA) is up 0.10%.
The 10-year treasury is up (yield down) and the dollar is down 0.03%.
Among our 35 core positions (excluding options hedges, cash and short-term bond ETF), 21 -- led by uranium miners, base metals futures, silver, Disney and MP Materials -- are in the green so far this morning. The losers are being led lower by carbon credits, energy companies, Eurozone stocks, healthcare stocks and AT&T.
Back-testing strategies and analogizing present-day economics is all good stuff to pursue, however, there's just no way around thinking (critically) on your feet:
"In economics, however, it is possible to get away from the failure of theory to play out as expected in reality. An event like the GFC occurs only once in history, and it cannot be reproduced to allow old and new theories to be tested against it. As time goes on, the event itself fades from memory. History can help sustain a memory, but economic history is taught at very few universities. Economists don’t learn from history because they’re not taught it in the first place."
Keen, Steve. The New Economics
Have a great day!