‘Where The Wild Things Are’
On Friday evening, we brought you some excerpts from the latest note by Deutsche Bank's Aleksandar Kocic, in which the best analyst on the Street reminds you that the ECB decision represents a continuation of a regime characterized by a communication loop between central banks and markets.
That communication loop (call it "transparency") effectively makes it impossible for market participants to form a long-term view, and thus it optimizes and entrenches "bad behavior" (everyone is a vol. se
we get it. the best explanation and easiest example to understand i have seen todate.
when the herd see’s it–it will be too late i.e. vol of vol.
but for now, us in the long vol/short market camp will suffer and the longer this takes the more dramatic the pullback (common knowledge). i have waited a good long while to fill vnx and i will take a 1/3 position on any NAZ spike monday morning (my last trade to fill). i will admit i got in too early (long vol/short market). my previous guess-ta-mets was a pull back in the spx to 1850/1875. my previous advisors said it was coming late 2016/early 2017. this was not the case.
graphing charts and adding % best guess last night i came up with an spx at 1595.
not pretty.
i hope others chime in on this thought. some of us could use a some other opinions /target numbers for the indexes, indu, naz, sp and vix.
thanks again to Mr. H. and all of his friends for sharing the truth.
good luck too all.
sb
I seen nothing standing in the way of 3,300 on the SPX. That’s more than a 4 cap on forward earnings and forward earnings have had a habit of being too conservative. At current SPX, we are looking at nearly a 5.5% cap rate. The 10 year yield would have to exceed 3.2% to get in the way of this trend. Corporate America at a 100 bps spread to the Treasury is still a good deal.