One of the world’s most powerful supercomputers, which has been retrofitted for trading the stock market, appears to be betting on a crash in the months ahead.
The Financial Crisis Observatory (FCO) at ETH Zurich released its latest Global Bubble Status Report on July 1st. As we discussed with FCO’s director, Didier Sornette, on our podcast in May, they use one of the world’s leading supercomputers to monitor global markets each day for two distinct bubble-like characteristics: faster than exponential price movement and accelerating oscillations (see Podcast: Using a Supercomputer to Trade the Market).
Their July report notes an increasing trend of positive bubbles across multiple asset classes.
Here’s what they say in their ‘big picture’ section:
‘One can observe the continuation of a trend in the growth of positive bubbles in the fixed income asset class for the second month. The fraction of stocks diagnosed in a positive bubble state increased this month to exceed 36% compared with 32% last month. Mixed bubble signals still occur only in few commodity indices. We also observe renewed bubble activity in currency pairs.’ [source]
This post was published at FinancialSense on 07/06/2017.
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