Thursday, April 2, 2015

Little Conviction

I had this raging feeling that the market would get smacked down hard in April, down to 2000.  But I am losing conviction on that idea, although I do foresee a bit more of a pullback, perhaps down to 2040.  But I don't have a lot of confidence in the idea because April has a tendency to be a bullish month and I am reading articles about lots of S&P hedging with puts.  I don't feel comfortable making a bet on a big down move, I would rather be an opportunistic short and sell strength, up to SPX 2080, and cover weakness down to SPX 2050.

Same goes for crude oil, I have little conviction on a short, and in fact, it could be we are in the process of forming a bottom.  I would rather just be an observer for now.  Probably the strongest market right now is bonds, believe it or not with all this Fed rate talk.  The spike up in early March has been completely faded, and it looks like the search for any kind of bond yield by global fixed income managers is relentless.

As far as the nonfarm payrolls report is concerned, I believe there is pent up demand waiting to get long bonds after that report, whether its a good or bad jobs number.  I don't see that pent up demand for equities after the report.

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