Very busy day today, as we had the initial spike in equities, we had the bund sell of again. It was another long end sell of relative the 2 year schatz as people getting out of fixed income and back into equities. We are reaching the 123.00 support in the bund, a break beyond that could see us quickly reach 122, and then to test 121. If we bounce we could head back near the 126 area.
Euribors have come of today along with the general market as we reached resistance 98.06 on the Jun 10 euribor, looking tomorrow for a move to 98 flat. Spreads all held in line which was a pretty uneventful day for spreads.
The main action today was in equities where we saw a massive spike in AIG, for what reason I still don't know, but my guess would be a massive short covering accompanied by stops being triggered on the upside. We say AIG go up from 60 cents to 1 dollar in a matter of minutes. HUGE MOVE before retracing slightly.
The same went for the rest of the market, where we came off the highs for the DOW as the inevitable profit taking came in after such a big rebound. I do belive we will rally a bit more before eventually testing lows again. I think the run up in Citi could be coming to exhaustion soon and may be ripe for a short in the 3 dollar area.
We shall see how it pans out.
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