Market Analogy and Trade!

From David Rosenberg:

One can only marvel at how the U.S. market managed to bounce back in the last hour of trade yesterday — the intraday move in the Dow exceeded 70 points. Yet, once again, volume faltered on the major exchanges. This remains one weird market, and reminds us of the story of the pig farmer — one sells a pig to the other for a dollar only to then have it sold back to him for $1.25 and then sold back to the other farmer for $1.75 and so on and so forth. It’s two pig farmers selling the same pig back and forth and driving the price higher in the interim — until of course, the price dynamics shift into reverse.

Maybe it's not so weird after all. Anyway, time to trade.

And I just had a thought that tempts me to double down on the bonds. Now that the Fed's stopped buying Agency bonds, anyone still in them should be running to Treasuries. But then again, China's been trading out of agencies for months.... It's not like any industry professionals can't see that spreads over Treasuries aren't the lowest in history.

Trade: short 10% position in AGO @ $21.44