Risk off resumes

Following a reckless resumption of risk appetite last week (perhaps led by an erroneous interpretation of Euro strength by algo computers? See: Biggest Market Headfake ever for an interesting take), the fear gauge is resuming alarm today. This updated chart of the 20-year treasury index (TLT) over the Canadian dollar (FXC) is one of the many which we have found to be instructive over the years. Last week’s drop in this risk barometer and rebound today bear an eerie resemblance to similar action we noted in the late fall of 2008. For an excellent update on where we really are at with the European banking crisis, see John Hussman’s piece this morning: Europe: Just Getting Warmed Up.

Source:  Cory Venable, CMT, Venable Park Investment Counsel Inc.

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