ajtj99's Market Pulse

[chainik]

AJ, very nice post. IMO the next big move is down, the only question is when it starts. Two comments


1. The shape of the yield curve (Gross)

Simplifying the story: the shape of the curve does not reflect the health of economy and probably is a poor indicator of recession/slowdown.

<many of these flows coming back into U.S. financial markets come from non-economic agents, hush-hush euphemism for central banks. What this means is that these “agents” are less performance driven.....and more concerned with.....high levels of employment in their domestic economies>

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2006/IO+02.2006.htm

2. Short position by commercials on S&P is not that extreme; when you put together minis and NDX, the overall picture is only slightly bearish. I think it was Shack who also pointed out that small traders have not joined the party; I agree with him.