More market confusion

Yeah, this sums it up. Source: Google images.

I’m confused.  Let’s review:

• US equity markets are at all-time highs.  Europe markets are there-or-thereabouts as well.
• Bond yields are at or near all-time lows in much of the Western world.
• Commodity prices have tanked, so gas prices are low.

Despite:

• Greece, despite some excellent game theory usage, looks ever more likely to drift into capital controls at the very least, and perhaps full ejection from the Euro.
• Ukraine’s ceasefire lasted…oh…a few hours.
• US equity markets now trade somewhere around 20-21x earnings.  Well above long-run average.

In sum: these moves kinda give me the heebies.  Glad to have a system trading for me.  With the long-run portfolio, I’m slowly but surely decreasing exposure to equities.

World financial markets to Japan Central Bank: 有難うございます。

Just as the QE tap gets closed by the Fed earlier this week, the Bank of Japan steps up to the plate with another JPY 10trn (around USD 130bn) of stimulus.  Queue financial markets back to all-time highs:

Doumo arigatou, Kuroda-san.  Cancel crash.  Source: thinkorswim by TDAmeritrade

My favourite quote on this, from Bloomberg:

“Markets don’t really seem to care about what kind of stimulus we get or where it’s coming from, as long we get something,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private-banking unit.

Once again, the dip-buyers win: even if you pulled out at the death cross, you were out of the market for all of about 1 week before you got back in (missing out on about 0.5% of appreciation along the way).  Guess we just keep going until it stops working!