The “Power of the Pattern” started highlighting that markets looked very much alike on 5/14 and the global patterns looked like a “Domino/Slippery Slide Effect” should be CLOSE at hand. (see look alike, dominoes and slipper slide)
These global patterns were suggesting that correlation risk, was extremely high and that until the rising wedges were to break to the upside, overall risk exposure should be VERY LOW AT BEST….since there was “NO PLACE TO HIDE” when looking at these key global markets.
Below is an update to the global situation first discussed 90 days ago.
CLICK ON CHART TO ENLARGE
I would describe the 2007/2008 time frame as the “Great Escape” window (See great escape post).
The above 6-pack reflected that correlation risk was sky high 90 days ago…..and it remains sky high!
Investors should not be surprised that people will look to “escape and hide“ from a broad array of investments!!!
If the past (2007/2008) was any kind of guide, protection of capital is the key! Cash, bonds and the Dollar did well then….will it be any different this time around?