Pitch dark - but are we in for an Equity bear rally before long?

* Time for an Equity breather?

We have broken through important support levels, especially in the US equity markets.
However, no market moves in a straight line, especially not with this level of volatility. From a TA perspective I am starting to lean towards a bearmarket rally before long.
Sounds crazy I know, but I am currently loosing bearish conviction.

I have taken some profit on my long bank puts, but I still have some left. Will be looking to ship these out as well, squaring up the bearish bank equity position.
Looking to reenter post rally (if there is any).
With correlations fluctuating wildly it might not be as crazy as it sounds. (see below).


* Gold continues to look like it is setting up for some serious stop loss squeezing on those massively long ETF GLD positions. Gold reaching down to 908 so far today. The real price action will however be seen when the US market comes in.

* Dipping my toes in long Oil.



* Seems reallocations of capital flows, a lower risktolerance across the financial industry, hedge funds included, have led to an increase in correlation volatility.

The correlation between assetclasses and sectors fluctuating wildly despite otherwise relatively stable volatility levels across assetclasses. Makes for interesting developments going forward.
We have recently seen some interesting correlation breakups;
- Gold and the USD.
- US and European equity markets.
- Equity markets and the CEE currencies.
- Equity markets and the JPY and to some extent, the CHF.


As always, good luck


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