Dog Barks

The long shadow of financial crisis continues to darken market participant activity. On a Day (and shorter) basis, stocks and bonds teeter-totter up and down in opposite balance. The last 3 sessions are excellent examples. The picture from a little farther away shows a more sideways oriented direction. Pavlovian responses to the moment's hype will never cease but the concept of Flight to Quality at every SP downtick is a tweaker paradise.

A few pointers from my dog:

If you're grabbing long paper, its not a FTQ. Outside of real crisis (and a 5 minute chart), bonds and stocks are positively correlated with bonds in the lead and stocks in tow. The Great Rotation is/was neither Great nor a Rotation (500 words, open your blue books [#GIK] now).

The JPM survey showed the highest long orientation in weeks. As @Conorsen pointed out this morning the TLT (every FI poseur's favorite proxy) is above the 200 day moving average. We have warned before, this is as it MUST be. Despised as Certificates of Confiscation in 1983 at 11.5% and hoarded and loved today at 2.5%. This is the infancy of the long bear. Tops are protracted drawn out affairs that challenge your ability to stay. This has been "Zee Ztabeelity" phase, when the trigger happy carve themselves up and the rear viewers embrace the "already happened."

Disclosures: We like to sell.

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