Friday, June 27, 2008
Although equity markets are currently bouncing as Macro Man writes, and the blog reader indicator ticked up yesterday, do any of the following make you comfortable picking the bottom in stocks here?
1) VIX ticks up, but only modestly so- particularly given the vehemence of yesterday's sell off. Is the street a little too confident in the Bernanke put?
2) The sweetest little head and shoulders pattern you're ever likely to see. Macro Man has previously pointed out the H&S in Eurostoxx, but check out the weekly formation in the Swedish OMX. It's straight out of a textbook!
3) The yen getting its mojo back? After the collapse of the SPX/ USDJPY correlation shook out yen longs, USDJPY is breaking its uptrend line off the March lows this morning. Such a break, if sustained into this week's close, could provide the JPY with a dose of giddyup next week.
It looks to Macro Man like stocks will continue to keep slip slidin' away until someone hits the panic button. Still, if you're long and wrong, or bearish and not short, chin up. Things could be worse. How'd you like to be Mr. Watanabe, who came home from work today and found that his missus paid up for NZD/JPY while he was at the office?