Watching this turn around, quite typical in short bear markets, makes you wonder what to squeeze of a quick return.
Bond managers have been piling cash into Treasuries or just hoarding cash ready to have a junk bond binge. By removing money from treasuries bond prices would drop and intense buying of junk bonds would put prices up there. Meanwhile markets are looking for any good news and the undercurrent is strongly positive tonight.
Some think this is the correction we had to have but I tend to think it's the correction of the correction we're going to get. Bond markets will tell soon enough. This coming hysteria tonight (some good building starts from the US perhaps) will start to labour late next week IMHO as the US markets eye the FEDs meeting the following week..
True market complacency can unravel in hours and I look forward to the 'mother of all unravels' next month.
The EZ markets are looking like hopeful eyed kids at Christmas for stimulus to be announced but unfortunately those misers and party poopers the Germans will not give way to ECB plans to buy crappy PIIGS debt, the junk bonds of Europe.
I'm a market skeptic and I don't believe anything I see. So enjoy the squeeze.
