S2N Spotlight
I have been driving all day, so I did not get a chance to do any meaningful research.
S2N Observations
The Hang Seng has had a cracker week up more than 9% with a Z-Score of 2.51 going back 50 years. That translates into 99.38% of the weeks returns sitting below this week. I guess that makes the current move signal not noise.
I also came across this chart earlier in the week, which is so typical of market exhaustion with sentiment extremes. The percentage of people short the China large-cap ETF was above 60%, nearly an all-time high. The caption by MacroCharts, “Bull markets are born on pessimism,” is so apt.
Gold has traded up 6 days in a row. It is not a common occurrence but is not very uncommon. My code for generating statistics is giving me grief, and I am racing against sunset.
In the chart below, I have combined all the different yield curves and plotted them on the same chart going back to 1980. The only thing that sticks out to me is that over certain periods the curves fan out like a peacock.
The market breadth for the S&P 500 remains pretty strong.
You have to laugh at the sheer exaggeration of the price differences Trump presents below. I would love to fact-check this. I am also wondering how this will age as we head back into a stimulatory environment.
Performance Review
For those who are new to the letter, the shading is Z-Score adjusted so that only moves bigger than usual for the symbol are highlighted.