more on bond concerns, strange stuff
the USGovt continues to refund 30yr TBonds with federal surpluses
hedge fund strategies have been turned upside down as the long end of the bond curve has become inverted
hedge funds are in midst of unwinding their strategies
the real action now, the real indicator of market response to inflation concerns, is the 10yr TBond
some economists are already beginning to incorrectly expect a recession
I predicted this back in November
money flocked into the 10yr TB late last week
money transferred from stocks to the safety of bonds
meanwhile, the G7 reaffirmed intentions to weaken the Japanese Yen
the G7 plans have already bolstered the USdollar
the Euro has dropped under 100 parity levels
my guess is that higher USrates have attracted European money
on world currency markets, the strength lies in the trilogy: Dmark, JYen, US$
the end result of the above currency moves is that the USdollar is the beneficiary on both continental fronts
look for the US stock market to benefit accordingly
on the technical front, the VIX volalitity indicator is reading almost 30, very high
the contrary call is for a short cover relief rally, esp in tech sector
for QCOM in particular, we sit several points below the Bollinger Band
I believe that level sits now at 117
my current worry is that we might encounter a second round of 3-days margin call selling
but on second round, I expect investors to be patient
a relief rally is coming, and they know it
/ Jim |
