Friday, February 26, 2016

Appetite For Self-Destruction

Consumption sentiment (Social Mood) (red) follows real estate or vice versa. Both peaked over a year ago...

Stocks follow consumption sentiment with a lag, and no doubt a feedback loop aka. "sumamabitch!!!"

Below, I measure market risk aversion using the Treasury/VIX ratio. Both instruments are "RISK OFF", but Treasuries outperform in bull markets whereas volatility outperforms in bear markets. Four week volatility is outperforming Treasuries right now. This will be the last dip that gets bought, after this, volatility will outperform everything...

Four week moving average:

Inverse VIX:

Recession stocks:

Recession stocks with USB/VIX ratio:

"Our pattern recognition software has identified another buying opportunity