While I was short term bearish on bonds, I am now looking to get into a long term position going long Treasuries, as I am bearish on the economy, and believe we are closing in on a top in the stock market. I don't buy the weather excuse for the weaker jobs numbers in December and January, as other data supports the thesis of a weakening economy. One decent jobs number doesn't take away from a trend of weakening economic data, despite a buoyant stock market. If the last pillar of strength in this economy, which is stocks, falters, then we will get a recession.
So over the next few days, I will be looking for spots to buy bonds, looking for a longer term move. I prefer to get bearish on stocks by being bullish on bonds. I am choosing not to fight the ample liquidity out there, where financial assets will remain overpriced. So I will just choose the one that I feel will receive more of the money flows going forward.
As for today, I will look to short any opening hour rallies in stocks.
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I think SPX will drop either next week ahead of FOMC in conjunction of renewed Ukrainian crisis or in Apr/May if clean economic data proves to be weak. Any thoughts?
Just the weight of slowing global growth will eventually take down the SPX. It will be a choppy top, there are so many dip buyers out there that we'll likely see something like April 2010 or May 2011.
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