From the desk of Willie Delwiche.
Key Takeaways:
- Range-O-Meter points to Risk Off environment
- Risk On index remains stalled, Risk Off components gaining strength
- Use breadth thrusts as guide that Risk On appetites have returned
The headlines remain noisy, but the message of the market is one of risk off leadership. Our Risk Off - Risk On Range-O-Meter shows the risk off component in most of these asset pairs gaining strength. Of the 20 pairs displayed here, only three (Value vs Growth, Aussie Dollar vs Yen, Lumber vs Gold) have the risk on component anywhere near new relative highs. In more than half the cases, the risk off component is within 10% of its highest level in the past year. This pair-wise intermarket view confirms the message from our Weight of the Evidence dashboard that argues for caution as conditions have deteriorated. The rest of this piece puts the current readings from this range-o-meter into some historical context and takes a closer look at our ASC+Plus Risk On & Risk Off Indexes.
