I’m sooo confused. All the correlations that we’ve leaned on for months have weakened and so far I’ve found nothing to replace them with. Some actual thought might be requires and I really hadn’t planned on doing any at least until after Labor Day…
There have been many conundrums today, but the biggest may be the inability of USD/JPY to rebound despite sharp rallies in commodity currencies, a modest rebound in US bond yields and covering of earlier risk aversion trades. It’s an enigma, wrapped in bacon. (or a riddle. Whatever!)
General dollar weakness may be the play, after Warren Buffett’s well publicised warning this morning. Keep an eye on the dollar index for signs that we’ve broken out of the recent micro-range. 78.30/35 support must break to get me excited near-term.