T-Bonds Moving to be the new Market Makers…with update at 9:30 AM

I’m back from visiting the Medicine Wheel in Wyoming, plus other points, maybe the energy will come back. 

With the exception of oil, the markets are generally up 1 to 2 percent since the September 16 cycle point but that is all about to change. 

The big news at this point is something new since the Bond market started it’s summer rally on June 11. Bonds now appear to be headed lower, apparently all the talk about economic recovery is ready to take it’s toll on interest rates.  The Fed may be forced to follow, but that is a little down the road, and I am yet to be convinced that a real economic recoveryis on the way unless some major job initiatives are undertaken, but in any case the financial markets completed a sell signal today.

Financial markets have been the bull rescue story.  The financial  XLF ETF,  late yesterday completed an interesting and important chart formation.  This formation, a two day island built on October 14th and 15th, and yesterday’s close under the September 16 level can be viewed as an indication of market direction change in the sector.

In the meantime the headlines of the past few days tell the story of the summer now over.

Execs at Bailed Out Firms Rolling in Perks and Benefits

Prudent Savers Are Losing Big in Recession

Also, Paul Volker makes a good point in the NYT.

http://www.nytimes.com/2009/10/21/business/21volcker.html

So lets watch these developments.  No position changes since October 8. 

9:30 AM Update… We have just sold out all of the long side of our long-short portfolio, ETF’s in technology, clean energy, and biotech.

Leave a Reply

Your email address will not be published. Required fields are marked *

18 + eighteen =