One of my favorite indicators on fear in the market is screaming 'panic!' The Gold/Silver ratio, basically the ratio of the price of gold to the price of silver is now sitting at around 84 - 85. The last two times it was at these levels was in '08 just before the financial crisis and in early '16 when the market saw a 20% correction.
While this isn't a guarantee that the stock markets are about to correct, they are definitely on edge and just waiting for a catalyst to collapse. That catalyst could be coming soon:
The Fed raising interest rates again could see panic in emerging markets, leading to contagion that eventually hits developed markets.
Trump's trade tariffs on $200b worth of Chinese goods are about to drop in the coming days. While i think the actual impact will be minimal due to tariff evasion, the market tends to panic about these things in the short term.
I've just opened a short position @84.75. TP@79 and SL@91. Will adjust accordingly depending on how the market develops. This is a trade that could take a few months to play out.
I'm also taking profit of stocks that have seen a nice run and holding on to cash in anticipation of a drop. Hopefully things go according to plan.
