Thoughts about market direction between T-Giving and end of year. Historically, the week of Thanksgiving is bullish, this year was no different. However, the 10 year went below 3.00 - if this continues down in yield, up in price, the recent gains in the S&P will be shortlived. The bond market has been right on the entire time.
Harken back to a year ago when the curve went inverted and stocks continued upwards. Looks like equities had it wrong, again. This time is no different. The tell is in the short maturities and 10 year. If the 3 mos. remains around zero and the ten year is below 3.00 - equities will fall.
So the question is what to do about it. Those familiar with my trading will know that I remain fully in bonds in my 401K. In the trading account - sticking with short term trades, under 30 days to expiration. The volatility is so high, the market could be down or up 30% within 60 days. Just simple credit spreads collecting anywhere from 5-15% per month.
