It started with oil
It bled into commodity types and FTSE.
The US meantime tried to fight it with volatility also having a splurge lower
but finally followed the commodity leaders and tipped overnight.
This all fits beautifully with classic overbought signals (I thank Cam Hui for this http://humblestudentofthemarkets.blogspot.co.uk/2015/10/a-whats-credit-limit-on-my-visa-card.html)
Capitulation of the shorts? We have even had macro funds throw in the towel and I don't just mean close down positions. I mean close down completely. http://www.bloomberg.com/news/articles/2015-10-12/fortress-said-to-plan-closing-down-macro-fund-run-by-novogratz
But to be a perfect fall this should be accompanied by a new news devastating concern. So far this morning the news is recycled old, known bad news and data is being twisted to fit.
The Chinese trade data out overnight, though soft was not as soft as many expected. It was a classic figure that can be used by both camps, so in that respect it isn't of much use at all. But it isn't terrible.
the UK BRC survey was released late last night and hasn't picked up much attention but saw September like for like sales exceed expectations +2.2%. Another sign that Joe Public is disconnected from the concerns expressed in financial land and hasn't got the message that this is a crisis? Come on guys, don't you know you are all meant to be suffering?
I can't get as worked up about inflation figures as others as I still see commodity inputs as the main drivers. Wages are not falling, so in many ways this is still good deflation mixed with bad inflation - that of all the monopolistic costs we have to endure.
The next bleedin' obvious that appears to be taken as read is this quarter's terrible corporate earnings. Braced we are, veritably braced! But so far the dribs and drabs aren't all bad. (H/T AL)
DELL/EMC: Agreed deal worth $67bn. $33.15 a share
BELLWAY: Beats expectations & raises dividend.
SAP: Q3 sales/profits beat.
LVMH: Quarterly sales beat, strong Europe/US.
I really wish I wasn't so cynical, because in a classic case I'd be happily shorting the back end of this market but the lack of new bad news (not the shoehorning of existing news), the disconnect between financial commentary and what the public is actually doing and finally the complete flip in commentary this morning calling this as the start of the next slide, makes me wonder if this turn lower is so so blindingly obvious it must be too good to be true.
And if you want any further evidence that the bear case may be a bit too discounted then this released by BAML over the weekend should be born in mind.
With this in mind and having cut my longs on Friday, I am working trailing stops as entries to long risk positions rather than piling into the shorts.