Thoughts {04.17.15}

No post on Spain again today as market events are putting my focus elsewhere.  Overseas markets are getting schmessed today.  A crackdown on trading has Chinese markets down around 5%.  Moves by banks to limit their exposure to Greek bonds has those markets rattled as well.  Maybe though, just maybe, these markets are selling off because they are very overbought by our work.  

Here's a look at the Chinese ETF GXC {held by us in certain client strategies}.

Chart comes to us from FINVIZ.com.

See how GXC has gone parabolic in April.  Then note that Chinese stocks have actually done much better than this in their local currency.  I heard on TV today that in local markets Chinese stocks are up 32% this year.  While I can't verify this number, I do know that they are up more at home than we've seen here do to the strength in the dollar.  That is the gains here are muted by the strength in the dollar.  European stocks, while not experiencing the same sort of move have also had a pretty good run so far in 2015.  There may be more to this as we move forward but for now I'm inclined to view this as markets reacting to an overbought condition.

Volatility may be about to raise it's ugly head but volatility is not the same sort of risk as most might assume when they think about the stock market.  Warren Buffet agrees with me on this.  See here.  This is also going to be the subject of a future post.

Back Monday, hopefully to write about Spain.  Tired though of making promises I can't keep.