“US sent cyber team to Lithuania over Russia hacking threat” was a story on Bloomberg yesterday. It cites reports from the Ukrainian authorities that cyberattacks have increased threefold since the war started compared with the same period a year ago.
Not all defensive bets
are created equal
are created equal
Fed day. A hawkish outcome is expected. Given beaten up equity market sentiment, tactical players may look for short term upside. However, here we consider efficient bearish bets.Premium content, for a full analysis sign up to a month of insights
The S&P500 remains cheap on Qi valuations. Even when the market bounces, Qi’s macro-warranted model value continues to move lower so the Fair Value Gap remains wide.
The recent sell-off in Gold has happened while Qi model value has continued to trend higher. That divergence has opened up a Fair Value Gap of almost -1 sigma or -3.3%.Premium content, for a full analysis sign up to a month of insights
Qi’s USDJPY model fell out of regime in November last year. Through the first 3mths of 2022 model confidence remained low but over the last month it has risen almost 30%.
This time is different
Friday’s sell-off took the S&P500 to 1.85 sigma (6.1%) cheap to Qi’s model fair value. The index has only been in regime & this cheap to macro 3x before. Back-tests show this is a highly significant discount. One that, since 2009, has provided attractive entry levels to buy the dip. It worked effectively just a month ago in early March.
Struggling for trade ideas?
RETINA™ provides a pipeline of trade ideas on securities you care about pumped into your workflow. Think of it as Bloomberg IB but instead of chat & commentary, it’s a series of signals flagging when markets have diverged from macro fair value.