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3 gold charts we are watching: Looking topish

The golden shooting star

Absolutely crazy action in gold, currently putting in a huge shooting star candle. This is not what you see at lows...

Source: Refinitiv

What is gold?

Just another assets where CTAs and fast money play around? Gold and SPX have moved in almost perfect tandem since 2022. The overnight spike has little to do with Fed, but more about the psychology of masses trying to chase the same stuff at the same time.

Source: Refinitiv

Too much gold euphoria?

The crowd has been busy chasing gold calls, pushing skew to extreme levels. The 1 month GLD put/call skew is indicating a possible contrarian signal. Last time skew traded here marked the violent top back in March 2022.

Source: GS

7 hours ago at 11:25

3 charts we are watching: Extremely cheap hedges

Repeat after me

Downside protection is cheap. The crash in skew has been epic.

Source: Refinitiv

We have come a long way

Another possible contrarian signal for the SPX. Skew suggest equity positioning is at 7.5/10 according to Goldman's derivatives guru Marshall. In late October we were at 3.5....

Source: GS derivs

Insurance

You buy house insurance before it starts burning, and you should be happy to pay a relatively small premium for that "privilege". Cost of SPX 3m at the money is at the lowest in "modern times".

Source: GS

7 hours ago at 11:29

Big short gone big long

The big short is now a big long

From minus 200bn to plus 200bn...

Source: GS

Crap is king

In mid November (here), we asked ourselves rhetorically when the chase for laggards and low quality would begin. Fast forward to today and things have really picked up. The chase for crap is on, and usually tends to last for longer than most think possible...

Source: Refinitiv

King equal weight

The latest squeeze in the equal weight NDX vs the NDX has been huge.

Source: Refinitiv

Fading "sentimentor"

As NVDA goes, goes the market, or can the low quality stuff keep up the market?

Source: Refinitiv

Can't hear the canary

Notable risk off moves in currencies sensitive to global "fast money". SPX vs MXN inv gap becoming very short term wide.

Source: Refinitiv

VVIX - new recent highs

The VVIX vs VIX gap is growing by the day...

Source: Refinitiv

but no panic

Goldman combines four vol components in creating their proprietary "US panic index". Panic is basically zero...

Source: GS

CTA superlatives

The unemotional crowd has been busy lately. Quick stats via Goldman's king of flow, Scott Rubner:

1. bought +$225bn in the last 1-month and are long $92bn of global equities

2. $58bn to buy in big up tape, $210 bn to sell in big down tape

3. biggest increase in exposure ever

Source: GS

130bps of cuts priced in

Mike Wilson stresses that with 130bps of cuts now priced into the Fed Funds futures market through year end 2024, investors have set a high bar for cuts to be delivered. The cycle peak in front-end rates is typically a bullish signpost for equities assuming that inflation is contained. On the other hand, if inflation proves to be sticky despite slowing growth, the Fed typically maintains restrictive policy later into the cycle, only cutting rates when the growth backdrop deteriorates significantly. (Morgan Stanley)

Bring out the hawkish rhetoric

Financial conditions have gone ahead of the "narrative". Fed meeting coming up. Recall what boss Powell said on Friday: "...It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease. We are prepared to tighten policy further if it becomes appropriate to do so."

Source: Bloomberg/Authers

5 hours ago at 13:46

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3 gold charts we are watching: Looking topish

The golden shooting star

Source: Refinitiv

What is gold?

Source: Refinitiv

Too much gold euphoria?

Source: GS

3 charts we are watching: Extremely cheap hedges

Repeat after me

Source: Refinitiv

We have come a long way

Source: GS derivs

Insurance

Source: GS

Big short gone big long

The big short is now a big long

Source: GS

Crap is king

Source: Refinitiv

King equal weight

Source: Refinitiv

Fading "sentimentor"

Source: Refinitiv

Can't hear the canary

Source: Refinitiv

VVIX - new recent highs

Source: Refinitiv

but no panic

Source: GS

CTA superlatives

Source: GS

130bps of cuts priced in

Bring out the hawkish rhetoric

Source: Bloomberg/Authers

Today's Top Stories

Powerful Storm Could Cover Millions In US East With Snow