We look at the current trend status among asset classes at the halfway point of 2014.
- The Bull Mode concentration is persistently high. The current reading is 73%. No pure beta asset class is either in Weakness or Bear Mode. For details check the Trend Mode Report.
- Even though a majority of the asset classes are in Bull Mode, the trend strength is not particularly short-term extended. View the current situation in the Overbought/Oversold Report.
- Turning to volatility, the Variance Risk Premium report for EQ US Large Caps shows a situation of “Caution” among equity investors. However, digging deeper, the cautionary stance is more a result of seriously low realized volatility as opposed to elevated implied volatility.
The Variance Risk Premium for S&P 500 has surged ahead of the Fed-meeting. The cost of protection has increased without an increase in the realized volatility. For details see the report Variance Risk Premium.
The Variance Risk Premium for S&P 500 is fast approaching the “Worry” zone. For details check the report Variance Risk Premium.