Thursday, November 19, 2015

Bonds Up Stocks Up

We are getting the long term investor's wet dream this week:  stocks up huge and bonds also up big.  The market seems immune for the time being with crude oil weakness, and dollar strength.  The immunity will not last for long.  What you are seeing is the inflows of the wait after Fed minutes to buy crowd.  They were substantial, judging by the price action.

The bond market is following the Bund, which has gone up for 8 straight days, the most since October 2008.  The Bund is extremely well bid, as there are lots of buyers who want to front run the ECB QE announcement in early December, and those who use the Paris terror as an excuse to buy Bunds.  Whatever the case, you cannot keep bond prices down for long when you have both ECB and BOJ with massive QE every month.  And the Fed will not spoil the party with any hawkish talk or actions.  They may raise in December, if they do, they will probably include a statement that they are on hold for a few months AT LEAST.

There is a power flattening in the 5-30 curve, seems like front running of the end of month buyers already.  The buyers are getting bolder and bolder these days with central banks who have their back.

Expecting a run up to SPX 2100 by Monday, at the latest.  We might even get there tomorrow.  With bonds this well bid, that is always a positive when equities are strong.  If bonds were selling off this week, I would be more concerned about downside in equities.

16 comments:

Anonymous said...

I'm short VRX at $75. Do you think this can come back down or does it look like it will go to $100?

Market Owl said...

I don't like the short play on VRX. There are easier shorts out there

Anonymous said...

You think Citron is F.O.S.?

Market Owl said...

Citron isn't accusing them of total fraud, it is a part of VRX that they are questioning. I don't follow it that closely because it doesn't seem like a good short or a long.

Anonymous said...

I was just kidding man. You know I wouldn't short stuff at the bottom. I went long Dec 15 75 calls at 75. Just dumped it. On to the next....

OL DAWG

Anonymous said...

Andrew Left = POS. You know it. 50% truth, 50% swindle.

Market Owl said...

Andrew Left is a POS but he does move the market. I've got my eyes on a trade right now, will let you know if the set up gets there. Still waiting for it. Do think this market will get slapped down again.

Anonymous said...

I would not get long here expecting things to go higher unless you are okay with a losing position. It's not a loss if you don't sell.

I would rather short than long here but even if I were to short here, I would scale in than go all in.

Anonymous said...

why don't you get in some SUNE there's gotta be a bounce in this bitch somewhere. I own 8 calls. LOL

Anonymous said...

I'm thinking GMCR is the next play. But it's acting very weird for a earning blowout. Acting like it wants to go to 45.

Thinking about picking up SWN (nat gas company) on a little flush at the close.

Market Owl said...

I know you are on a roll but why don't you just wait a bit for the next play. Money burning a hole in ya pocket? Get rich or die trying? haha

Anonymous said...

I'm not on a roll. I fucked up getting long CVX calls when it crash from 98 to 92.5.

I shorted it at 98 with puts then got long thinking it was oversold. Although it bounced to 94.5 and I could have made a decent profit, I didn't see and sold it at 90ish.

Market Owl said...

Dude, I would get long bonds on Monday. Get long TLT calls. I expect a pullback in stocks will ignite bonds higher.

Anonymous said...

I don't like to chase and I don't expect the market to pull back much. Next week is thanksgiving nonone is gonna be there. That's why I'm buying garbage at bargain basement prices. Like SWN and GPRO calls.

Market Owl said...

There will be plenty of action during Thanksgiving. It is not like Christmas which is completely dead. Lots of action in individual stocks and futures as well next week.

Anonymous said...

I'm thinking you're right. People do trade thanksgiving week and go vacation later.

But just like it took a long ass time for the market to sell off in the first two weeks of this month, I think the same will happen this time around. We're not even at the same level where the market sold off recently. We might even go higher.

I don't like this market short or long. But one thing I do like is beat up shit stocks who have a chance given retail sentiment like gpro and oil/nat gas stocks like swn. Rather own these long than short in this tape. We'll see what happen..

Get rich or die tryin...