Something else notable about this market. While for the most part the macro indicators flashed their typical RISK ON behavior (stocks up, gold down, Swiss Franc down), Treasuries surged. A lot of folks took notice.Joe Weisenthal, Business Insider
OK, got it, gold is a safety asset, stocks are a risk asset, thanks Joe.
Joe, a trader, is talking about the new correlation, when risk is on, buy some Treasuries! I would think this new correlation is happening via the exchange rate channel. Something to watch.
What is the risk in channel theory? Risk of inventory failure. When risk is off (Gold up,stocks down) that must mean their is an unsustainable debt trade bubble nearby.
So, whatever gold is, it helps me remember the trade direction in the risk on, off model. It is risk on when the buyer seeks risk.
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