There was a time, long before central planning was the feces, when stocks and risk in general would correlate with the notion of decoupling, most traditionally represented by the AUDJPY, which has always been the best proxy of Chinese relative strength via the non-pegged Aussie dollar, and the now defunct carry currency of choice- the Yen, a distinction since ordained to the US' very own "reserve" currency. In those long gone days, the ES and the AUDJPY would correlate almost with mirror image perfection. Those days are now gone, and a brief correlation mapping between the performance of the two indicators shows that the ES is now about 16 pts rich to some hypothetical fair value, which however courtesy of above mentioned central planning, is completely useless and irrelevant. Suicidal types may want to play a convergence. In the summer those trades would always close profitably without exception. Lately, that is no longer the case, indicating just how incrementally more busted the market has become in just the last several months.
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