It is Risk On Again !

Seems like the markets have rallied top the  idea that the budget ceiling limit is sorted out…so it is business as usual…buy equities ! and probably a little bit of dollar as the relief trigger some short term enthusiasm….but you know my view on that one. The ICI US mutual fund flow data definitely point out  to some significant flows going into international equities, so the dollar weakness will come back….Anyhow I re-run my  Regime Switching Markov model and there is definitely statistical agreement….Risk On  sell the VIX !

markov 15102013