Self-doubt and markets

I do not know what it is about Thursdays but I always get 'concerned' with my positions on Thursdays take this morning:

From the word go the market is taking RISK ON based on this simple analysis:

1. Swiss National Bank have intervened 'heavily' in EURCHF  (In all honestly I think it was more game of people re-playing the fight w. Bank of England in September 1992, namely: Fighting the SNB @ 1.4200. For now SNB won, but EURCHF will go lower still in the end.
2. S&P 'failied' at least in first attempt to take out the 200 MA - making it a buy-opportunity for the long-always crowd. Macro cycles are good as you will know!
3. Friday vote on Euro-zone package in Germany and the meeting of minds (Financeministers once again in Brussels to detail some of their 1 trillion package)

so......there is all reason for bring cautious but as I wrote last week, when in doubt go to your premises:

1. Macro theme: This is about solvency not liquidity 
2. Leading Indicators: The model we monitor is indicating contraction incoming - not expansion as seen by the Ivory Tower investment banks
3. Beta model: If in doubt stay with its modus.
4. Sentiment: Monitoring the ratio of MFI(Money Flow Index) to move in SPY

Macro Theme:


If this is about solvency I find it odd that BTP vs BUNDS keeps expanding away from insolvent toward solvent. This is key concern - and our main leading markets indicator for now:

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.....and why is LIBOR-OIS spread rising day-by-day?

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LEADING INDICATORS:

We track this model: http://www.consumerindexes.com/   - A high frequency data points analysis and it is indicating slow grind lower and not a V-shaped recovery as most Investment Banks loves to talk about!

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Beta-model

This is the model we fall back on when in doubt as we have tracked it to slightly outperform S&P with much better sharp:

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SENTIMENT

Several measures but I prefer MFI vs price-action as it tells you NET buying and takes algo-trading intraday et al:

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Conclusion:

When visiting all the premises and NOT listening to the market noise there is still no real sign of:

• Market/Central banks adressing solvency issue
• Leading Indicators: If anything - incoming data will disappoint relative to expected....
• Beta-model is neutral but getting ready to go short.
• Sentiment: Private investors still exiting positions.

Be safe

Winston