Commodities and equities are more interesting, but that is really the same trade. Energy prices remain limp, thus providing an excuse to take stocks higher. The rally appears to be becoming more broad-based; small caps, which had lagged the rebound off of the June lows, have now kept pace with the S&P 500 since mid-July. This suggests that participation in the equity bull is broadening. The OIH took a sickening lurch below 120 earlier in the week before snapping back. The danger is still not over, however, and the DIA/OIH spread remains (un)comfortably offside. Perhaps we need to see evidence that specs are actively short the energy complex before a more meaningful rally can occur; in that vein, tonight’s CFTC data will be especially interesting. Certainly oil is trading limply despite the efforts of OPEC to talk it up.
That’s about all the writing that Macro man can muster this morning....hopefully payrolls or the Hungarian political vote can inject a spot of volatility into markets that have become well and truly dire for anyone not short vol or long equity indices.