We got a monster V bottom yesterday and suddenly many fast money traders think the short term worries are gone. While I don't believe, we should have the usual drift higher ahead of a holiday, especially after the washout that we had the past few days. The market is broken and toppy, but it always worries me when I am on the same side as Dennis Gartman.
I won't try to short the bounce here, because with options expiration tomorrow, as well as the holiday, the risk reward isn't there, even though shorting at these levels should payoff within two weeks.
It also looks like we got a temporary top in Treasuries, with the 10 yr yields tagging 2.60% yesterday, and then selling off hard from there. I am still long Treasuries, and will remain long. It is a longer term play for me, and my target is 2.50% on the 10 year.
The emerging markets and China fast money trade appears to be over. China was weak again yesterday, despite a GDP beat. The trend is still firmly down in that space.
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