Sideways consolidation pattern for NQ on Friday. Inflection point for Monday is 2740.
-- Above 2740 implies it is going to rally up with resistance at 2750, and 2764.
-- Below 2740 implies a re-test of Thursday swing low, 2714 and 2705.
Record High Risk Appetite
Drip…drip…drip… day by day, stocks leak higher, gradually inching up to record nominal highs; credit yields compress to record lows (and spreads near record pre-crisis tights); and volatility compresses (realized and implied) to near all-time-record lows.
We have discussed the positioning of the market (S&P 500 futures at their net longest since 2007),
crowded nature (JPY Shorts and NKY Longs), and
sentiment (AAII Bulls near record highs).
But, it is Credit Suisse indicator of risk appetite that should be worrisome for most investors. With Credit Risk Appetite well beyond any previous record high and Global Risk Appetite at its highest since 2006, perhaps it is time to consider the hedging discussion we had yesterday? With the euphoria dramatically dislocated from fundamentals and empirical world wealth trough-to-peak moves indicating a turning point, the lack of bearish arguments is deafening.
