Tuesday, July 12, 2016

August Do Over @10x Risk. RISK IS BINARY

Good times...
Last summer everything was going great until China started devaluing their currency. One year later and what's changed? U.S. stocks are at a new all time high, while EVERYTHING else is lower...

Global stocks are lower
Oil and commodities are lower
Global financials are lower
Global GDP growth is lower
Deflation is lower
Global yields are lower
Corporate profits are lower
Dollar / Yen is lower
Junk Bonds are lower
Transports, Tech, Biotech, Retail, and Financials are lower

And perhaps most importantly, the currency that caused all of last year's turmoil, the Chinese Yuan is lower:

One year ago (July) is circled:

Deja Vu, sort of...
U.S. Financials peaked exactly one year ago...

Global Financials
Red arrow is last July

Leadership is rolling over...

Realized volatility is already at late August levels...