Stocks (/ES, SPX, OR SPY)
So far I am neutral on the stock market until it breaks its sideways trend. If the S&P 500 futures break above the 1431 level I will become officially upside biased for the short-term. I think it is likely that we see a break to the upside in the stock market, because of the good economic reports involving the jobs numbers. I also am starting to see earnings season improve after the string of junk we've seen before. My downside model is earnings get worse and we break below 1400.
Bonds (/ZB OR TLT)
If the stock market rises I expect bonds to move down as money moves back into risk assets. I also am seeing an increase in interest rates, but the move in interest rates may just be a fake out, and they could move down. Overall we are depending on earnings to drive bonds. If earnings season is better expect downside movement. If earnings are worse expect the opposite.
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