Well, if nothing else I am answering my own question…am I cut out for blogging. Answer: No. On the bright side at least no-one is reading it and watching me make an idiot out of myself LOL.
So what is going on?
The US Treasuries have continued to trade higher almost every day. Higher price = lower yield, and I think this is a reflection of what the market is really deciding on all the apparent signs of economic strength.
The stockmarket has been reacting to the ‘risk’ play, and why not – volumes have been low (they look big because of the shenanigans in the 5 stocks being gamed with massive volume (5 stocks = 20% of stockmarket turnover … I don’t think that’s sustainable LOL) – but who cares, work with what’s happening.
OK, so last week saw range-bound trading on the ES. I had given some though to whether it was distribution or absorption, these two alternatives have very different implications.
The absorption hypothesis seemed to make little sense, there was no technical resistance around. The distribution hypothesis fitted much more closely with fundamentals and likely technical moves.
So, USTs creeping up and the stockmarket distributing.
Other influences – the Chinese stockmarket has been smashed on quite a few days recently, down more than 25% off its highs, with little reaction from the US stockmarket. Oil, down too. The AUD and the EUR were hanging in.
In the ES on the 1st Sep we had some economic figures out showing more strength, but for the first time in weeks a strong figure didn’t help the ES higher, it started to drfit off. The AUD and Eur also started to come offf and then there was unwidning of some of the marginal risk possies. Es ended just below 1000.
OK – so where now?….Update about half an hour before opne, let u know then!