In the short term, it should be straight forward. An upward bias with limited volatility in equities. Bonds will be a bit more difficult to predict, but I expect a downward bias with ordinary volatility. The ECB meeting and nonfarm payrolls will inject some movement into the sovereign debt space. I am still short bonds from last week, with a plan to cover sometime this week, hopefully lower than current prices.
Beyond this week, I am looking for an eventual topping of the S&P at slightly higher levels, which should provide a decent short entry, simultaneously proving a good long entry for Treasuries, as they should dip lower on higher equities. AAPL is acting very strong lately, there is a WWDC event today, don't know much about the details, but usually they don't amount to much. But AAPL wants to go higher, it is the type of stock that is in high demand on Wall St., these days: the stock buyback with value stock characteristics.
The main event this week is the ECB, seems like Draghi will at least meet expectations which seem to be just for a rate cut. So limited downside from the ECB meeting, and if Draghi talks QE for the future, it will get the bulls excited for sure.
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Very nice call on bonds, it started to look like they can never go down.
Thanks. I have covered half my short, and will wait for a bit lower to cover the rest. Regardless, I will be covering the rest of the short ahead of nonfarm payrolls on Friday.
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