Uddrag fra Marketear:
Cash is trash
Cash levels dropping to the lowest in 15 years. Everybody getting sucked in…
Source: BofA
Call spreads for the melt up risk
Let’s see what happens with the possible gold revaluation “case”, but we would continue to use options instead of punting deltas here (call spreads for the bulls). Gold volatility has risen, but remains much lower compared to previous melt up phases in gold.
Source: Refinitiv
DAX mania
Mighty DAX can’t get enough. RSI is at overbought levels, but as we like to say, we can stay in overbought territory for longer than most think possible. DAX has basically been in overbought land since mid January. Note how far from the 50 day we are trading.
Source: Refinitiv
Spot up, volatility up
Surging DAX index continues to be accompanied with index volatilities squeezing higher. This is the classical spot up, volatility up market, where underexposed investors chase upside optionality. Volatility measures pace, not direction….and the upside force in DAX has been extreme. We saw similar volatility behavior when the NASDAQ whale was sucking up NASDAQ calls.
Source: Refinitiv
Speculation in a pic
A quick history lesson of the NASDAQ whale. Note how NASDAQ volatility, VXN, surged in tandem with the NASDAQ index. We all know how that ended. We are not saying the same must happen in DAX, but strong spot up, volatility up should be monitored closely.
Source: Refinitiv
Hungry retail
They keep pushing this market…
Source: GS
Funding spreads
Maybe funding spreads don’t matter anymore? Should you be concerned about professional investors ditching this market? GS: “…this continued decline makes us concerned that an important cohort of investor is seeing reasons to be cautious on equities; on the other hand, the lack of large declines over the past month make us less worried about imminent equity declines.”
