The Ten Year future moved back onto the "trap gap" for MLK Day after the entire complex rumbled another upside pattern Friday. The new year has been one equity carnage day after another and a string of debris ridden explanations why. The continued meltdown toward equilibrium in crude is often mentioned as culprit #1. The contract is 6 dollars contango into next Oct. quietly disputing the claim. Another blooming meme appears to be that Chinese equities are only remotely connected to their economy. That both are sputtering and the same can be said for Uncle Sam provides me little succor.
Meanwhile, on Main St., postal service prices rose 14% last week. Fed Ex and UPS followed with 5% upticks. Back in my time, when trading was conducted with charcoal on cave walls, it was common for businesses to ring in the new annum with attempts to "take price." I expect more companies to take a shot leaving Q3 and Q4 to adjust to the consequences. After a decade of "too much everything," structured restriction is coming back into vogue. The oil patch is well played out but even Walmart is closing stores. Will Chinese manufacturers be able to gear down peacefully? How you gonna keep 'em down on the farm now that they've seen Shanghai ? I feel we are finally going to find out.
John Q. seems to have a default position in the market now. I've found little daily market juggling with most workers. The hype, convoluted causation, simultaneous apocalypse/buying opportunity is confined to the "professional" community now. Then, there's the Fed. All those pretty charts of how well equities do after the Fed starts raising rates are wrapping month old fish. I continue to be skeptical of a CB attempting to steer a quantitative ship with a rates rudder. Markets have tightened conditions farther and quicker than sweet Aunt Janet and her Merry Pranksters intended. The monetary primordial soup remains vast, however. Hooper is scratching behind his ear and we are set to start selling Notes again.