GENTLE BEN DROPS THE ZIRP BOMB

Hum a bit of a suprise but as I had noted here before EFF were trading around 30 bps anyway so it really doesn't change much in my opinion...

now what we are likely to see is some type of continuation rally and many bottom calls...fine fair enough...getting kamikaze style short here is much finer art then say back in april or may and all i got is my old bac position so bring it on...I am going to wait in the weeds to take a position short...pretty sure it will arise...

Now however longer term I must start thinking about how this resolves itself, about our national debt and where stocks, commodities, jobs go once we turn...but i dont think we there yet...

As to Ben buying long end of curve that is fine too...take a look at what japan 30 yr bonds trading at...of course ben trying to compress risk premium but then this begs the question of solvency vs liquidity...Japan has been near zirp for how long...funny though today the 0-25bps just leapfrogged Japan in the race to zirp

Just a couple of areas to watch

old 82 area and the rising trend line off the bottom...got no idea what happens tomorrow but i will be an interested spectator and keeping these areas in mind

McClellan still has room to go and put/call does not indicate panic

dream scenario is nice big dump tomorrow and a chance to scale in long but cautiously...little friday and maybe some into opex week...we shall see what happens though

EDIT: note the tiny little gap in the spy dating way back.....

Cool Map of 90 day + mortgage DQ

http://data.newyorkfed.org/creditconditionsmap/

i read that one in 10 people are 30 days behind on mortgage...

i also read that 1 in 12 people in san diego were 90 days behind...this was over thanksgiving and until i saw this map i thought it might have been a bit too bearish a number...well Ben be saying that the LA times writers were right...real bad if your geared up 12x on mortgages eh???

oh well have fun with this map...

Daytrade setup

The bottom is left screen on my eturd platform...the charts are the same except i moved that fvx chart up a bit and drew a few arrows on the spy...as soon as we made a higher low on spy off that support and did the same in bonds i decided it was real good chance to get long...a break of that early trendline would have been confirmation that i should exit trade and wait for another test of the 82 area....also you will note xlf got bid pretty hard too which is important factor in this market...

will write a bit more later in regards to the overheated trin that also helped to factor into the decision...usually though if the market was to bust this resistance level we would have seen tnx fvx do a big dump...this time the dump came much earlier and they acted as an early warning system that risk would catch a bid