Flight to quality: the Risk Pulse went from +16.1 to −19.9, with 4 changes of pattern.
The day
The Risk Pulse went from +16.1 at the start of the day to −19.9 now, moving between −45.0 and +16.1. The pattern now is flight to quality: equities selling off, VIX spiking, crypto risk-off. It describes how the mood moved today; it is not a forecast.
- ① Fri 15:08 The pattern turned stagflation; the Risk Pulse was at −42.2.
- ② Fri 20:38 The pattern turned flight to quality; the Risk Pulse was at −37.5.
Above 0 the mood leans toward risk, below 0 it leans cautious. It describes the mood as it was; it is not a forecast of direction.
The close
Asia: Nikkei level 4 (normal), Hang Seng level 1 (very calm).
Europe: DAX level 4 (normal), FTSE MIB level 4 (normal), FTSE 100 level 1 (very calm).
United States: Dow Jones level 6 (high), S&P 500 level 8 (extreme), Nasdaq level 8 (extreme).
Moves of the day
- 16:40 · Regime shift: FLIGHT TO QUALITY: equities selling off · VIX spiking
- 16:58 · Regime shift: STAGFLATION: equities falling · oil up
- 19:34 · S&P/TSX Composite down
- 19:52 · Russell 2000 down
- 19:54 · Nasdaq 100 down
- 19:54 · Nasdaq Composite down
- 19:54 · S&P 500 down
- 20:34 · Regime shift: FLIGHT TO QUALITY: equities selling off · VIX spiking · crypto risk-off
Times are Milan time.
The Nostromo's note
The markets saw a significant shift in mood today, with the Risk Pulse plummeting from +16.1 at midnight to -37.1 by the close, indicating a day marked by a flight to quality. The US markets were particularly volatile, with the Dow Jones closing at level 6 and the S&P 500 and Nasdaq both at level 8, reflecting extreme movements compared to usual sessions. In contrast, European and Asian markets were relatively calm, with the FTSE 100 and Hang Seng closing at level 1, indicating very calm conditions.
The news desk noted a pattern of equities selling off, the VIX spiking, and a crypto risk-off sentiment. The options market priced a significant level of fear, with S&P 500 options pricing a typical day of 1.08%, while the Nasdaq 100 options priced a typical day at 1.59%. The Dow Jones options priced a typical day at 0.99%, and options on Gold and Oil priced typical days at 1.43% and 3.60%, respectively. Overall, the markets were rougher compared to their usual levels, with the BRL/USD being the roughest at 1.83 times its usual volatility, while the CNY/USD was the calmest at 0.24 times.
Written by our AI desk from the numbers above; checked for forecasts and invented numbers; approved by the Nostromo, our AI co-editor.
Stress Test: the water now
Of 16 broad markets, 11 are calmer than their own usual, 4 about as usual and 1 rougher. The roughest compared with its usual: BRL / USD at 1.83×; the calmest: CNY / USD at 0.24×. The furthest below its peak: BRL / USD, 71.5% below (on 11.8% of its past days it was even further below).
The price of fear
Options work like insurance against big moves: their price tells how big the market thinks the next month's moves will be. Over the last year, the options on Oil asked for the most extra: on average 0.64% a day more movement than really came.
| FUND | OPTIONS EXPECT NOW | MOVED, LAST 21 DAYS | USUAL GAP | EXPECTED MORE |
|---|---|---|---|---|
| S&P 500 SPY | 1.08% | 0.61% | +0.35% | 97% of days |
| Nasdaq 100 QQQ | 1.59% | 1.22% | +0.31% | 90% of days |
| Dow Jones DIA | 0.99% | 0.56% | +0.27% | 96% of days |
| Gold GLD | 1.43% | 1.08% | +0.10% | 56% of days |
| Oil USO | 3.60% | 1.88% | +0.64% | 81% of days |
All values are the size of a typical day, up or down. Measured Thu 29 Oct, 23:10 (Milan). It says how big moves were priced, never which way.
Our record since the start
Since the start, forecasts written the evening before and then checked: 726 right of 1365 (53%). A coin would give about 50%. Every one is on the Track Record page, wrong days included.
How to read this
- Risk Pulse: one number for the mood of the markets, from −100 (everyone runs from risk) to +100 (everyone looks for it). Around 0 is neutral. It describes the mood now; it never says where prices will go.
- From … to …: where the Risk Pulse stood at the start of the day (midnight, Milan time) and where it stands now. It describes how the mood moved today; it says nothing about tomorrow.
- The pattern: what is moving together right now: risk-on, calm, neutral / mixed, crypto stress, risk-off, flight to quality, liquidity squeeze, stagflation, bull trap, bear trap or exhaustion. The words after it are the moves that set it.
- Moves of the day: the moments our instruments flagged: a stock market moving far more than usual, a sudden jump in one of the data feeds, or a change of pattern.
- The Nostromo's note: a short comment written by our AI desk from the numbers above, checked by a program that blocks any forecast of direction and any number not in the data, then approved by the Nostromo, our AI co-editor.
- The Fat Lady's desk: the companies whose stock had the biggest day compared with its usual one after a news story, with the reason our overnight news desk gave when it first read the story. We do not reproduce the stories or any price.
- Stress Test: the water now: each broad market compared with its own long-run usual roughness: below 0.8× is calmer than usual, above 1.25× rougher. "Below its peak" is how far it stands under its highest point so far.
- The price of fear: options work like insurance against big moves. "Options expect" is the move their price asks for, as the size of a typical day; "usual gap" is how much more (or less) than what really came, over the last year. Measured every weekday evening after the U.S. close: the Log shows the latest measurement.
- Our record since the start: every forecast of the size of the move written the evening before and checked after the close, since the Barometer began. A coin would be right about half the time.
— Written by the Nostromo and the Fat Lady, our AI desk, from live data only; approved after automatic checks. Published 22:30 Milan time.