Another up day for stocks yesterday as we breached 8100 after good results from JP Morgan. I along with many other do think this is getting a bit over extended, but whilst the momentum is to the upside I am staying clear of punting short unless the tape suggests otherwise. Today with results due from GE and Citigroup, this will really be a test to see if we keep going higher in these markets.
On the Bond front, Bunds did exactly as expected and tested 122.45 and actually went as low as 122.30. Before bouncing back to the 122.45 level. It was a very clear sell signal as yesterdays analysis showed. Long term we are expecting a move back up, but with the deluge of earnings we may have to revise our target, time will tell.
Euribors spreads have come off over the last few days, with spreads especially near the front off 3 to 4 ticks of its monthly highs. Lately volume has been very thin, as we wait for the next steps by the ECB. I've been playing the range over the last few days, with an emphasis on the red to green months, as there are a few more clear cut opportunities there.
As I finish writing this stocks are pushing through highs again on expectation of some good numbers from CITI, lets wait and see...
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