Dec 2020 Balancing Act
It’s December! Seasonality would suggest that when it comes to equities it really is the season to be jolly. However, spoken like a true market participant, there are some caveats which means “this time might be different”.
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We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
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The markets have been very clear recently on where they think major asset classes are going into 2021 as equity markets continue to grind out new highs and the Dollar falls to two-year lows.
Even though the over-arching themes and biases are very much intact, there are some short-term caveats that we need to keep in mind. Complacency for equity longs, according to the put call total composite, is back to levels last seen back in June and September.
Why is that significant, both of those two cases signalled a short-term top for the S&P500 as well as a short-term bottom for the US Dollar. Apart from that various investment bank greed and fear sentiment gauges has moved into “warning” territory for the current equity risk on push.
So, does this mean equity markets dump, and the Dollar regains “King Dollar” status next week? Well no, as we said the larger themes remain intact. But it does mean that we need to pay attention to what the market is telling us, especially going into the thinner liquidity and lower volume month of December.
We’ll go through all of this and more in our week ahead video.
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Highlights of the video:
00:22 – Current Baseline
07:03 – Baseline expectations for the upcoming risk event
09:33 – Sentiment Shifts & Trade Plan
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If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below were you can learn more about it
https://financialsource.co
----
We interpret and explain price moves in real-time, 24 hours a day. Our team of analysts produce text, video and audio commentary.
You understand the markets and trade with confidence. Learn more at our website here: https://financialsource.co
-----
The markets have been very clear recently on where they think major asset classes are going into 2021 as equity markets continue to grind out new highs and the Dollar falls to two-year lows.
Even though the over-arching themes and biases are very much intact, there are some short-term caveats that we need to keep in mind. Complacency for equity longs, according to the put call total composite, is back to levels last seen back in June and September.
Why is that significant, both of those two cases signalled a short-term top for the S&P500 as well as a short-term bottom for the US Dollar. Apart from that various investment bank greed and fear sentiment gauges has moved into “warning” territory for the current equity risk on push.
So, does this mean equity markets dump, and the Dollar regains “King Dollar” status next week? Well no, as we said the larger themes remain intact. But it does mean that we need to pay attention to what the market is telling us, especially going into the thinner liquidity and lower volume month of December.
We’ll go through all of this and more in our week ahead video.
----
Highlights of the video:
00:22 – Current Baseline
07:03 – Baseline expectations for the upcoming risk event
09:33 – Sentiment Shifts & Trade Plan
----
If you find these weekly analysis and trade ideas useful, you’ll love Financial Source. There’s a link below were you can learn more about it
https://financialsource.co
