RE:RE:RE:RE:Do you understand the structure? Not a long term investmentFriday (last week) was a game changer. The surprising NFP report will likely delay the rate hike till before the US elections. The planned rate hike has been the main catalyst for keeping the SP at near ATH since early April. The Fed is on record as saying (earlier last week) that they don’t want a June rate decision to have an effect on markets during the Brexit vote. Brexit has not been priced into the market yet and is leading 52% to 48% in polls.
VIX futures, gold miners, gold (and other contrarians) can’t go anywhere when a rate hike is imminent. It’s not surprising that gold jumped so much on Friday. Surprisingly the YEN and US treasuries are high. This tells you there is a lot of fear. But it has not translated to an equites sellof (yet)
The VIX can only move up when Big $ decides to buy significant amount of put options/shorting on the SP500 futures or just start buying VIX futures (which is really cheap right now). Big $/hedge funds can’t just dump billions of dollars of shares. They have to sneak around by shorting SP futures, buying VIX futures ect. When this happens, the selloff begins.
I think we are very close in seeing this type of sell off like we saw in late December/early January.