Market Anthropology: SPX/FXA Analog Update

Wednesday, September 19, 2012

SPX/FXA Analog Update

Although equities and metals have held on to their post QE melt-ups, the Aussie has pivoted lower – proportionally to the model’s turn – and has retraced the entire move from last Thursday. Should the analog continue to be prescient, volatility should increase in the back half of the week – before price (and risk appetites) breaks significantly lower through the end of the month.  

As a side note, I believe the pressure differential encountered in the oil market this week is a shot across the bow towards the resource sector. Many times you find this several sessions in advance of a major pivot in a sector that is overcrowded, thus unstable.