Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: John Pitera who wrote (19525)	7/12/2017 10:21:15 AM
From: The Ox	2 Recommendations Recommended By Hawkmoon John Pitera Read Replies (1) \| Respond to of 33421

One of the $64,000 questions facing this market down the road. Since the FED has continued to state that this process will long and, as much as possible, carefully telegraphed, I think many of the complications that will arise from the unwinding are many quarters away (if not a year or 2 out). Your "proprietary" buy/bull signal continues to look solid and implies that there's not as much trouble in today's market as many of the bears/naysayers believe to be true. Even though this is the background, I believe it's wise to be cautious about the intermediate future of the US equity markets. Cautious but not necessarily negative. VIX/VXX and it's brethren continue to work "normally" in my opinion. We're seeing buying after each pull back and very little downward cascading one would expect to see before a breakdown in the indexes. Brenner commented on a common theme that all global rates have shot up at least 20 , 30 basis just since June 27th... and that draining the 15 Trillion in QE liquidity will be a really onerous mission. *Credit and liquidity creation really only moves in 2 directions....* It's binary ---- It expands..... and if it's not expanding it contracts. It expands and all boats rise...... credit creation and liquidity creation... and when credit creation and liquidity contract all boats are floating in a lower sea of liquidity... He reiterated the risk parity hedging technique that is used in both fixed income and in stocks around the world and the "risk parity" method of forced hedged selling is not at all widely understood. the risk parity trade /hedge is a good topic for further exploration. Interesting comments out of WF about auto loans Wells Fargo (NYSE: WFC) is scaling back and remolding its auto lending business in response to growing stress in the market, as well as a bank-wide push for more centralized risk controls. Although it was the No. 2 U.S. provider of auto loans less than a year ago, Wells has already cut quarterly originations by nearly 30% over the nine months leading into March 31. ...and high yield bond ratings High-yield covenant quality plummeted in June - Moody's Jul. 12, 2017 7:49 AM ET\|By: Stephen Alpher, SA News Editor Covenant quality of North American high-yield bonds "drastically worsened" in June, according to Moody's. The agency's Covenant Quality Index rose to 4.48 from 4.26, now just four basis points shy of its all-time worst-ever score of 4.52 set in August 2015 (the index ranges from 1 to 5, with 1 the strongest investor protections, and 5 the weakest). At issue was a large concentration of "high-yield lite" bonds which automatically receive a score of 5 on that index. There was also a high volume of private-equity-sponsored paper that was rated at 4.31 - a massive deterioration from May's 4.04. More blips on the radar to keep a closer eye on....