While CrazyDiamond has posted an attractive image and some solid points from a traders perspective, Chartonomist is unable to avail images very frequently due to the nature of his responsibilities. Though this does not allow Chartonomist to ruminate.
So EM did have the recovery that was in the making but who would have expected such heightened enthusiasm. Ben has done a brilliant job as far as I am concerned. Picture this: two months ago, saying US yields will be 60 basis points higher, and stocks will be at exactly the same place globally, if not higher. He has steered market confidence to the upside. Not just locally, but globally.
It is time to step aside. Perhaps EM underperformance kicks in again. But not right now. Lets load up on the high yielders, or perhaps even the low yielders. Lets load up on anything because perhaps it is just outright risk 'on'! What we do need to get out of is cash...at least for a few sessions. Ironically, this means not being too bullish on the USD despite the USD leading the global normalization in rates space.
Short term trade: Buy AUD if it gets up above 0.9350 as we suspect in this scenario, there would be pain...a lot of pain. A lot of bearish positions will bleed.
By Chartonomist
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