Broad US Market
Should seek support in the SPX 1120 to 1150 range for Santa Rally.
Emphasis on should, because we never take systemic risks lightly, and the
risks are indeed systemic. Broad US stocks in bear market, regardless.
This is where the frightened herds are flocking, and right on schedule. The
USD has been noted to be bottoming for months now. It is positively
correlated w/ the GSR, and thus sopping up liquidity. USD is toilet paper,
but we are talking about market action & emotional herds in the short term.
High risk to bears, and reducing risk to broad bulls in short-term only.
Santa rally can be looked at as sell or short opp. on broad market. Bear
market rules apply.
The risk is that global and US managers will lose control this time, or
simply be constrained by public opinion (i.e. growing discontent with
business as usual policy) world wide. Result? Cessation of functional
markets as liquidity is sucked away in derivative whirlpool.
US Treasury Bonds
Same M.O. as the USD. The ‘safety’ of US T bonds, the DEBT of the Great
Inflator. The deflationary side of the boat is full of huddled masses. Only
brave contrarians dare step to the ‘risk asset’ side.