It's Not Just 'Retail' Who Is Rolling The Dice

There has been a lot of chit-chat over the past few days about some crazy trades taking places in the stock market:

• Hertz, which fell to around 55 cents a share when it filed for bankruptcy last month, closed on June 8 at $5.53 - that's putting an equity value on the company or about $786 million.

• J.C. Penney, after filing for bankruptcy, saw its stock fall to 32 cents a share. On June 8 it closed at 63 cents - that's an equity value of about $202 million.

Are some savvy investors putting pencil to paper and discovering some hidden value that will somehow appear in the reorganization process? Likely not - As we know, it is rare for shareholders to get ANYTHING following a company reorganization via bankruptcy.

What appears to be happening is that some folks (relatively on the cheap) have put some momentum behind these stocks to drag others in. It is the ultimate "risk on" trade.

But this acceptance of risk is not limited right now to retail investors (the ones who would likely be playing the Hertz & J.C. Penney game above). Institutional investors are taking on more risk as well.

Excalibur Pro monitors risk and the markets willingness to accept it through a couple of different tools. One of them - The Riskometer - tracks some of the more speculative instruments across asset classes. We look at current prices against a moving average and what we are seeing is some pretty significant willingness to take on risk. The only indicators that have not moved heavily into the "risk on" territory are the Hang Seng Index and the SSE Composite. Those have been under pressure because of China's trade war with the U.S. and in Hong Kong, also because of China imposing its national security law which is seen as removing more freedoms for Hong Kong citizens.