04-10-2013 06:58 AM
This should be interesting today.
The trading public is definitely nervous about what may or may not happen today. Saw a lot of defensive plays and short covering of options.
This Japanese QE story is getting bigger. They are roughly 40% of our economy but have embarked on a program to print 1.4 times as much as we print in a year. They will be the big test. Their investors are fleeing the cheapening yen and buying Euro assets and US assets. That is why we have seen some strength as of late in the equity market here.
Gold is at $1580. Oil is off .43 cents at 93.77 and the 10 year rate is 1.76%. Interesting to note that Bill Gross from PIMCO says that he wants to go LONG the treasury contract. Very odd that he thinks that loaning the government money for 10 years at 1.76% is a good idea. I think that he is very concerned about the economy and thinks that the rate could go below 1.50%. For example the Japanese 10 year is .57% and the German 10 year is 1.27%.
Let's see what the numbers bring us today..
04-10-2013 10:25 AM
Big question is the japanese yen and the carry trades that the BOJ effort to depreciate begs people to put on- sell yen, buy everything paricularly if it is USD denominated.
Qestion is, can they stop the slide in an orderly fasion or does it get out of control and become self-reinforcing?
Wish I had an answer.
Would observe that the US stock market has record long commercial interest and record long margin. Doesn't mean that there is a high, means that if something pulls the rug it could get very ugly.