We Got Ourselves a Face Ripper
I began expecting a strong rally early Sunday (yesterday) given recent good news on further progress in the Eurozone. Here are my thoughts on what they’re trying to do.
While the rally in risk assets certainly seemed impressive there were some “unanswered” questions. 1) Oil pulled a large bearish reversal (why?); 2) the bond market did not indulge in the new-found bullishness. Both 10 and 30-yr U.S.Treasury yields actually fell for the day.; 3) Copper, while it rose, also showed some weakness into the close.; 4) Italian yields didn’t budge (they still remain above 7%) and one of the rumors causing the rally was refuted (IMF).
I’m going to hold back another day or two on placing hedges. This rally will have to grow on me. Let’s see if tomorrow provides follow-through.