Friday, March 20, 2009
So now it gets interesting.
After a sharp rally (bear market or bottom, depending on the coolur of your spectacles), and a "kitchen sink" policy response from the Fed, we now get to test the resolve of the bulls. The uptrend line of the bounce has been breached, and it will now be down to the true believers to show an appetite to buy stocks "on sale."
Or was the rally just a bit of short-covering? Certainly Macro Man knows a few punters who are/were short, and the chart of the HFR macro hedge fund index would appear to suggest that the industry was damaged by the rally. As is always the case, stocks rallied just enough to encourage any chart-reader to get out, particularly in the context of such a shock and awe responsde from the Fed.
Sod's law would suggest that the decks are now clear for a renewed downdraft. Macro Man has sold a derisory amount of Spoos, just to have his little toenail in the water, but is fully prepared to engage more fully if the dip-buyers go AWOL.
The dollar trade, however, still appears to have some steam in it, with system funds in particular showing a solid appetite to kick George Washington in the groin. Hell, even USD/CNY forwards have come in, trading at the year's low. Of course, they still price in a tiny CNY depreciation from current levels. The joys of beggar-thy-neighbour....
Finally, a query to Macro Man's American readers: what the hell has happened to the radio industry? Macro Man has recently acquired a rather neat piece of kit that allows him to listen to radio stations from all over the world through the stereo system in his living room. This was great last weekend, as he listened to a bit of the ACC tournament while reading a book.
But he then went searching for his favourite radio station from his college days, one that was voted as America's best in Rolling Stone in the early 90's. Imagine his chagrin, therefore, when he tuned into the station, and found it had turned into somethign called "The Rooster."
Any readers who can suggest a good alternative/indie rock station with a minimum of ads or talking DJs should feel welcome to do so. His current favourite is an Irish station which plays great music, but sadly has regressed from it's early-Noughties days as a pirate radio outfit.