Inflection point! Something seems to be happening, but what? Money is moving around. The global economy could go either way, but it seems to be improving.
This is a very tricky moment — a lot of traders seem unsure what to do next.
What side are you on regarding global growth? Are you above or below 8 percent on China GDP? Above or below 2.5 percent U.S. GDP? Is Europe in a mild recession, or a more severe one?
Big volume for the second day in the iShares Treasury Bond Fund getting hit hard again today, down another 1.5 percent on heavy volume to the lowest level since October. There's your money out of bonds.
The dollar is rallying again today, and has been up almost every day this month.
That is putting pressure on commodities, with gold down 3.3 percent to a 2-month low, gold stocks at better than 52-week lows.
The S&P 500 is only down fractionally, but the overall stock market is weak: 3-1 declining to advancing stocks.
So where is the money going? Some have been anticipating movement into corporate bonds, but the biggest ETF in this space — the iShares Investment Grade Corporate , peaked in early March and is down 1.09 percent today, one of its worst days in months. This is not that surprising--investment grade bonds usually trade at a spread to Treasuries.
Cash is the logical answer. Why? Because this may be an inflection point! There may — or may not — be sufficient OOMPH to the global economy. What to do?
The main imperative: do not get caught long Treasurys when the big move comes, because it may be a tidal wave!
Ergo: some are moving out of bonds, parking in cash.
Bookmark CNBC Data Pages:
Want updates whenever a Trader Talk blog is filed? Follow me on Twitter: twitter.com/BobPisani.
Questions? Comments? firstname.lastname@example.org