The Market: Thinking Fast and Slow

Discussion

With the equity market now in a “window of weakness” post-OPEX, the Fed confirming “higher for longer at the long-end”, the weight of the “oversold” evidence not yet oversold enough to overcome the decisively negative fundamental backdrop, and the historically precarious September/October period looming, in my opinion it is mission critical to zoom out and not get distracted by day-to-day cross-asset market movements. This is a difficult position to take for me because I’m a market junkie who stares at cross-asset market relationships all day every day. As such, it can be tough for me to ignore what might be a micro time frame set-up while focusing on the high probability medium-term outlook.

As they say in the counseling community, “if you mention it, you can manage it.” I see some very, very short-term bullish signals that I need to mention (thinking fast) in order to manage (thinking slow) the decisively bearish 3+ month outlook.