5 signs the painful "de-leveraging" process might be nearing an end.

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VIDEO: We discuss 5 reasons we believe the painful de-leveraging process might be nearing an end

Please click below to view our Macro Minute (duration: 5:29).

The chart in this report is only accessible to members
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As many are aware, we have viewed the bleeding of stocks in the past two weeks as part of a painful de-leveraging process. This stems from the dual growing risks of (i) disappointment around inflation trends and (ii) growing geopolitical risk. And as such, this is causing investors to de-risk after a strong first 3 months of 2024.

There are 5 reasons we believe this de-leveraging might be closer to ending:1. Spot VIX could be moving below 18, coupled with US yields flattening2. VIX term structure (4M less 1M futures) is uninverting3. Equity declines accelerating to downside as 5-day rate of change -3.6%4. CBOE Equity Put Call ratio hit 1.13, recently sign of tradeable low5. The cycle studies by Mark Newton, Head of Technical Strategy at Fundstrat, show potential low in 1-3 trading days The last time the VIX term structure (4M less 1M) inverted, then uninverted, was March 2023 and that represented a major low. The uninversion shows markets see lower probabilities of a major high volatility event in the near term. De-...
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