Hi Guys, No it's not a Chapman video or anything like that. I've been doing abit of analysis tonight on the risk on/risk off trade it appears we have moved from the risk off to possibly risk on now. I have come to this conclusion by looking at Australian 10 year bonds which over the course of 2 days have shot back up to almost a yield of 4% again this is suggesting the risk on trade has possibly diminished this is also reflected in U.S treasury's as well over the last 2 days. This is partly why the AUD is heading back towards its highs as people are moving money from "safe assets" into more speculative assets like the AUD(slightly speculative) and this can be seen i believe in the move up by precious metals. I believe last time we went into the risk off phase Australian 10 year bonds headed towards 5% and that was around the time silver/gold hit new highs this is due to a huge influx out of traditional safe assets into more speculative assets(i know there precious metals but for now the market still see's government bonds as safer). If anybody had a chart comparing Australian 10 year bonds and AUD with gold and silver you may see a trend with the risk on / risk off trade. Would love to hear everybody's input on this but i see this as possibly a good entry point to go long silver(as long as there are no sudden shocks out of the Eurozone or U.S which would cause us to go back to the risk on trade). Cheers.
Gold is a really interesting one, when theres allot of risk in the market people start buying USD/U.S Gov bonds and gold as well so gold performs not to bad. When it's risk off people will start moving into stocks ect and more speculative plays like copper and silver in a risk off environment i would be much more inclined to look to silver but you will do well in gold as well. This risk off trade seems to be on the back of Greece basically succumbing to another round of debt... the market see's this as a good thing(you can only assume the market is not looking to far ahead yet as we all know it will end badly for Greece and other nations).
I barely know what risk on/risk off trading is, though I can thank you for the idea of a 'risk on' trade environment being positive for silver - but I can only guess at what you're saying. Don't you mean "the risk on trade has possibly grown"? Don't you mean "which would cause us to go back to the risk off trade"?
Today i noticed the Aus 10 year bonds have now rose above 4% which they have not done in sometime so we should see moves upward in silver/stock market and AUD rising. Today has been abit mixed on markets because the market assumed yesterday Greece would just auto-accept more debt but today news came out that it's not so simple(at least not yet). This whole play relies on Greece taking it up the ass for another few months. If we wake up tomorrow morning and we find Greece has filed for bankruptcy then this whole plan goes totally out the window.
Great minds think alike. James Turk reckons there is going to be a big bull market move real soon, possibly within the next couple of days.
If you look at the chart for Aus 10Y bonds you will notice after 2008 when Lehman collapsed there was a huge shock and run into Gov bonds then the printing started and the move went back into stocks ect. Now we are at a new bottom in bond yields so i believe we could see a similar run up in bonds hence risk off and a run in more speculative trades. if the Aus 10Y bond yeild keeps rising then this is almost certain i believe. Today they are above 4% to 4.05.
Either you are cognitively challenged or I am - quite possibly me. If we're now "at a new bottom in bond yields", and you're expecting "a run up in bonds" I assume you mean a run up in bond yields. That is, you expect bonds to be sold. Bonds being sold is risk on behaviour, not risk off behaviour. Risk on behaviour would intuitively be good for the price of silver. What I'm saying is I believe you've got your terms back the front. 'Risk on' is where they get on to risk - they buy the riskier assets (or short the safer ones) 'Risk off' is where they get off risk - they sell the riskier assets and buy the safer ones like government bonds
I quite possibly got it mixed up i tried to read back on what i wrote and i got lost in it But what your saying i believe thats what i meant i should have simplified it more regardless we are at a turning point it seems Thanks for the head up anyway.
I sort of got what you were saying but found it confusing. Hope it wasn't too pedantic. I'm interested in the idea but it will probably go to the too hard basket. Australian bond yields are low now according to your chart but the AUD is ballistic. One is supposed to indicate flight to safety I think you're implying (but soon to reverse), the other is supposed to be a risk asset.
No. Risk OFF is when institutions delever - meaning SELL riskier assets. So stocks fall during Risk OFF. But when some bonds fall = yields rise = it is also Risk OFF. That is quite confusing actually because bonds are considered safe - so when Risk OFF = UST bonds go up. I guess everything depends on how you look at it. But bonds in Australia reacted to interest rate decision rather than Risk OFF. Also - I wouldn't be that optimistic with silver right now. It is because I am afraid we may be entering a sell off phase in everything, so - well, Risk OFF. -) Keep cash and wait for it. At least 2 weeks.
Did you notice the word "some"? You see - some markets are treated as one investment - which means their bonds and stocks and their currency move alike. So during risk off - you see a sell off on everything. It pertains to emerging economies. That is why I said it is confusing sometimes.
I have a strong feeling precious metals espescially silver will make a large move one way or the other in the next 3-6 months. Based on ......Nothing.
yeah I dont think it will go sideways for much longer but of course it is just my opinion based on nothing but a gut feeling so it is worth about as much as a sack of dirt, but maybe as good also as all the fancy charts . Except retarded monkes chart , that takes some real skills...
Looking at AUS 10Y bond yields which fell last night back below 4% it was just a matter of time before silver dropped. I believe this may be a accurate method in somewhat predicting price movements.
