CRUSHED

The yen should be watched closely. Many players are probably short it because Japan isnt raising rates. However, if they are long bonds and have to sell the yen could fly a bit. We shall see.

Bonds were smoked today in a rout that was a long time coming. Is FCB buying finally coming to an end? Who knows. Its hard to make a case for US bonds when the spread between the US and ROW is closing. How about the MBS players? Convexity problems? Maybe they need run some more monte carlo simulations. Note to all math genui. When the mortgage balloons from xxx trillion of debt to xxxxxxx trillion in 4 years no model is going to be able to predict the outcome.

Housing is done 3 percent. Banks 1.2 percent. Reits crushed 3.5

Yen is also finally getting a bid. I think its fair to say that its the most undervalued currency in the world. Corporate profits in Japan are rising and unemployment is 3.8 percent! Insane.

Decent selling, but it doesn't look that concentrated and the stem model at sentiment trader is getting oversold. The transports and housing are getting crushed followed by banks. The concensus is that rates are going to have to raise because inflation is to stubborn around the world. I think a lot of it has to do with high resource prices as opposed to labor, but thats just my opinion.

The aftermath of jobs.

ok. The jobs number came out at 157,00. Its about as bland as expected. Actually the market reaction doesn't seem as robust as you might think. 70,000 contracts is a lot volume, but the delta isn't that great. There is some patches of selling.

If there is one thing I have noticed is that sp is struggling around these levels, but the longer we consolidate the better chance we have of going higher.

The only other worry for the bulls is yields. They are in a firm downtrend and that will way on the markets at somepoint.