The euro is falling rather sharply against the dollar today. Despite the boost to the dollar, oil is up to $70.50, and gold is nicely higher to almost $1190.
The homebuilders are leading this morning after existing home sales were reported to have spiked +7.6% in April, more than expected.
Asian markets were mixed overnight, but China bounced back +3.5%; the 10-year yield is roughly flat around 3.20%; and the VIX is down another -6% to 37.72.
I think it's important that the VIX is moving lower. The chart below shows the action on Friday, when the VIX surged to a multi-year, but reversed lower to close down for the day. The chart shows that big negative reversal on Friday, and hopefully that implies that the VIX has topped, and will continue to move lower in the weeks ahead.
I have said that I would like to see it get back down below 30 to signify some calm in the markets. It is very difficult to trade when the VIX is over 30, as the market is very prone to large swings at any time.
Trading comment: We haven't done very much with our portfolios. I still think the market should bounce further, and I would look to make some further sales into that bounce. While I am getting a big defensive in our big picture asset allocation, I think for the intermediate-term, the market is more likely to stay in this wide trading range as opposed to breaking down further.
long GLD
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