Vine Investing
  • Home
  • Home
Search by typing & pressing enter

YOUR CART

9/12/2016 0 Comments

A near perfect reversal

After Friday's sell-off in an "all down" day we look to have our confirmation continued by the opposite occurring. By having a down day and an up day in your portfolio you can better see what asset classes, and what market factors, are moving your portfolio. Looking at what moved the markets up and how that resulted in gainers in your portfolio (and then again in the opposite direction) to see if the market is confirming your theory or there are other factors at play outside your current understanding.

​Friday was a near perfect up day for the US Divergence play in the Inflation space. The dollar rose to the yen while bonds, commodities, and stocks declined. Today started off mixed with the yen up, bond yields up (prices down) and stocks up. Brainard then spoke and came out dovish which the market (at least half of it) didn't expect. Markets quickly came back into line with stocks continuing the rally, the dollar continuing the weakening and a sharp reversal in the short end of the bond curve. Commodities  also came back from their lows making the latter half of the day a 'perfect up' day in terms of the Divergence theory. 

No one likes red in their account (unless you are trading in China) but having a good confirmation of being perfectly right and perfectly wrong lets you know that the theory  and your asset selection is in line with the events you are looking to play. If you do not have perfect up and down days it helps you look at how you can adjust. For example if you were short 30yr treasuries Friday you made money along side the rest of the market but you would have been slightly up as well today. This could be from the inflation expectations that lower rates for longer will have in the future. Either way this play might not be the best for the US divergence trade as other factors are affecting the price movement (inflation expectations in the longer run).
0 Comments



Leave a Reply.

    Archives

    June 2020
    April 2020
    March 2020
    December 2019
    November 2019
    October 2019
    September 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    July 2017
    June 2017
    May 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    April 2014
    March 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010

    Categories

    All Chinese Debt Commodities European Disunity Inflation Policy US Earnings

    RSS Feed