The chart below is oil volatility index. Low volatility is a precondition for breakout of volatility
One more chart showing narrow range
so how is the market positioned?
Highest long speculative position in oil in quite some time.
Highest short speculative position in US treasuries.Everybody is positioned for “REFLATION” trade and short treasuries
And everybody is short equity volatility (VIX) and hence Long Equities. From Trump is bad for equity markets to full on Trumpflation with rub on effect on our equities markets… how sentiment changes
So to summarise Market participants are unanimously long crude oil, long equities, short US treasuries and bonds in general,short VIX ( absolutely no fear)
when Everybody is on one side it require a little nudge and the boat just tilts ……..that is the law of nature.
