“End of the World” (EOW) Redux?
In case you hadn’t noticed, Short Gold isn't working so well today. Gold is up over 3%, north of $1,300 for the first time in five weeks. The VIX is up about 1.5% at 12.74, while the US 10-Year yield is around 2.48%.
Barron's, Zero Hedge, and Twitter contra stream all go bullish on Gold after one up week.
But lest the EOW folks soon forget, despite its uptick today and 1.1% move last week, the plague which is gold is still down over 20% year-to-date. Meanwhile, EOW Fear (VIX) was crushed again last week, down -9.4% to around -30% YTD. That’s right. Down 30%.
Who knows? Maybe this EOW uptick had something to do with the most conflicted and self-serving headline of the week so far—Pimco's Bill Gross saying the Fed won’t tighten until 2016 at the earliest. Shame on you Bill Gross.
Speaking of bonds, these current levels are creating another attractive short-selling opportunity in 10-Year Treasuries.
Finally, US stocks are in the green again today. The S&P 500 is at a new all time high and is up around 19% YTD. The Russell 2000 was up +1.3% last week and is up over 24% YTD also notching a new all-time high. (Yes, All-time is a long time.)
While our Fundamental Research and Quantitative Risk Management signals remain aligned, We’ll continue taking the other side of EOW. The End of the World trade is still getting smoked.