I think there's an unwritten law: As long as I'm positioned in an instrument AND watching it, it won't do what I want and/or expect. It's like a phone that won't ring when you're looking at it or expecting a call.
So you can bet I wasn't expecting a rally today!
How would the rational side of me explain what's happening?
1) The German, French, UK and US economic data (PMIs, etc) were a positive surprise
2) CDS Longs are reducing positions ahead of the ECB meeting Thursday
3) EURUSD bouncing 150 pips after a 700pip move down isn't really a big deal (and still puts it nowhere near b/e for me).
4) The S&P range 1180-1200 has been broken to the UPSIDE ?! (Will be very interested to see if it holds, because that should cause some people to hop on - then again I guess that's where all the shorts had their stops)
5) The market thinks that haircuts aren't going to be in the cards near term. No blood to lick.
6) Speculation the US is about to aid Europe?! (Kind of a joke if you really think of it)
As long as Europe and the US do the Japanese move of just guaranteeing everything and not allowing losses (from sovereign debt haircuts), the system can't break.
Instinctively everyone is shorting into the big move up. I'm tempted as well because:
The minute some drizzly no-action statement comes from the ECB, you can bet your ass the CDS market will start pricing risk again.
No comments:
Post a Comment