The mysterious ZARJPY indicator of global turmoil is flashing red once again as BofAML's Michael Hartnett warns of soaring sentiment into a potential "summer of shocks."
With BofAML Bull & Bear index (from 0.1 in Feb to 5.0) sentiment at 11-month highs, Hartnett sees the world split into the next few months…
"Summer of Stocks" (boring macro/trading range/grind higher) plausible… cash still high, US/EU credit underpinned, breadth improving
"Summer of Shocks" (buy vol) more plausible… H1 policy "panic" ended this week, BofAML say Fed hikes June, bears getting "stopped in", Japan yen surge, China bond vigilantes, ISM<50, BREXIT all risk-off shocks
Wall Street/Fed continues to play "cat and mouse" (risk rallies end when Fed hike expectations imminent, and start when Fed hike expectations postponed).
And (hedge fund) redemption, (central bank) repression, (market) regulation risks remain very high as the flash crash/pain trade era to continue.
The post ZARpocalypse Now? BofAML Warns “Summer Of Shocks” Looms appeared first on crude-oil.top.