Posted by: jhamon | March 2, 2010

(Late) MysteryHedgie: Why Are Equities Rising?

(This was written yesterday by MysteryHedgie, but we were out of pocket.  Our apologies.) 

Follow the Money… Market participants are wondering why the Euro and the British Pound can be so weak vs. the $ today (this has been a sign of general market distress in recent weeks) yet equity markets remain buoyant. We think the answer lies with beginning of March flows. 

With participation and conviction light, the “black boxes” are investing in the trends broadly defined by their 200 Day Moving Averages; short £ (see below ) short €, long $A and $C, yet gold is bid, and stocks, where most indexes (the Israeli TA-25 has made a new high, even as oil trades $80) remain above 200 DMA’s. 

Expect the alpha-generating quiet to persist prior to Friday’s US Jobs report where a number that deviates from the -50k consensus can reinforce or change trends based on the Yield Curve’s reaction. 

The Pound Plummets


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