Why This Market Is Very, Very Dangerous…Its All One Big Liquidity Trade
After looking at the graphs below it doesn’t take long to see that all the markets are correlating and acting like one trade. Typically, when this happens we tend to see a major stock market correction. This is not a timing indicator and I am not suggesting that it happens tomorrow. My point is that this is not the time to be taking a tremendous amount of risk especially unhedged risk.
Take a look for yourselves and you’ll notice that stocks are the most correlated they’ve been since 1987. You might also note that the last time we got this correlated was…yep you guessed it, 2008 which was just before the onslaught of the global credit crisis. As far as I’m concerned you’ve been warned!!!
Source: Wall Street Journal
Source: Wall Street Journal
Source: Bianco Research
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