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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (17828)	3/4/2016 11:24:13 AM
From: The Ox	Read Replies (1) \| Respond to of 33421

I think the spike is (obviously) directly related to the Swiss changing of their currency peg. Also, European QE steps, combined with the view at that time that Abeonomics was going to quickly change things in Japan. With Germany being the "heart" of European economics, or the strongest engine, the knee jerk action didn't take long to come back to the mean. Very possible we're seeing the overreaction by the market during the past couple of months but not in as dramatic a fashion to the downside of that ratio. I think it clearly indicates the "fear factor" or caution factor I was referring to with respect to capital allocations (and seen here in this bond yield ratio). I think it's very important to consider the growth of algorithmic trading and supercomputer modeling as one of the reasons we see many more massive (usually) short term disconnects in areas of the financial markets where we almost never saw moves like these in the recent past. Systems are "probing and gaming" the markets wherever they can. The advantage of those who make the "first move" during these attempts to pressure an individual market (or basket of markets) has tremendous benefits, especially if one doesn't overstay their welcome. That's off the top of my head....what's your view?