Good Afternoon on this Monday and start of the July 4th Holiday week,
My apology for the late start, and second apology for taking a short cut and relying on Dan Rawitch’s commentary today. It is on point and succinct, which I think everyone will appreciate. Keep in mind that the bond market closes early Thursday and is closed Friday for the holiday.
The Dow is mysteriously up over 400 points, which is amazing given what is happening with the virus and some very large states shutting many things back down. Hospitals are becoming overrun in some cities and it is clear the economy will not be snapping back. Not sure how long the market can stay positive given these facts AND that the most important index I follow, the BMI :”Big Money Index”, has finally started dropping and the largest funds in the World have begun selling. Once their selling starts, it is incredibly rare for them to stop. They will take rallies like today and sell at the top each day. When billions and billions of selling begin to accelerate, no amount of FOMO retail buyers will stop the wave from crashing. This will be bullish for rates, which surprisingly are falling in spite of the equity market being so strong. Bonds know best, so the fact that they are up, is a story in and of itself. Although I am bullish on bonds, please be careful as we have run up hard and are now hitting some strong resistance at the 104.20ish level.
Please remain healthy and stay safe.
Make today great!