Amazing chart since March LQD, investment grade bonds. Now that is one consistent trend with barely a hiccup along the way.
Really, you should look at a 6 mo semi log chart of LQD. Rarely will you see such a linear trend.
Bernanke's War on Cash working in the corporate and high yield bond sphere too.
This has not even been a fair fight for bears on any category of risk assets.
That's what zero% interest rates on "safe" short term money will do.
Repeated many times starting 5 mo ago:
Once rates go to zero, the only reason for $trillions to stay in cash is fear. Fear that putting the money in riskier assets like stocks, bonds, real estate, precious metals entails excessive risk vs. reward.
Start grinding down that fear and money leaks out to risk assets which get repriced...up.
Once begun...rising prices increase demand and reduce perceptions of risk. [of course, reduced perceptions of risk are not necessarily the same as reduced risk. We feel true risk was far lower in early March when perceptions of risk were extremely high]
That's what has been happening in a nutshell along with considerable improvement in the real economy vs. where it was in eary March.
These easy to understand concepts have trumped all other analysis based in input not nearly as important.
It has trumped a zillion ya buts like "rising unemployment", "overbought", "my business still sucks" etc.
Now we will see if "gap fill" on the SnP provides an excuse for some pullback starting next week.
It "should" but then
last Sunday we stated [paraphrased] "this week should be a more even match between bulls and bears and result in choppy trading and a likely down monday".
Lets see...Wrong on all counts as the bulls planted bowling balls between the eyes of bears...for yet another week.
Day and week guesses are about just that...guesses.
Hey, you try it!...Guesses are free and usually worth about what you pay for them. [g]
Fabian
End of the quarter coming up. A lot of institutions may want to pretty up their reports as the quarter ends and reports go out to clients. A factor bearz should consider.
Hint-Pretty up may not mean ending the quarter with oodles of cash and performance well behind benchmarks because they did hold too much cash for the quarter.
Remember...institutions often have a quite different mindset than we do. We report to no one at the end of the quarter.
These guys often have to hold their noses and do things they don't truly believe in....like chase performance benchmarks and lower cash in a strong quarter to show clients they were not so stupid as to sit in cash during a great run.
And...institutions move the market.
That's not a prediction of a run right to the end of the month, but is something to factor in.
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