Positions
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+100 GS @ 105.94 vs. cost @ 74.79
+2000 UYG @ 2.91 vs. cost @ 2.00
Markets
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Today was all about the Fed and their plan to keep mortgage rates low through treasury/agency buying. This has caused an enormous rally in treasuries (10yr Treasury Rate -40bp today). Equity markets obviously liked the news that had been speculated, but not confirmed. The S&P500 briefly crossed 800 and financials continue to surge as expectations that the worst is over surface. Let's not forget about the huge short squeeze in Citi and other stocks. A very common trade on the street has been to short the common stock and go long preferred shares. These traders have been crushed and have had to close out their shorts - aiding/causing the large rallies.
Economic data is likely to stay weak for some time, but markets are finally seeing the light at the end of the tunnel. I'm still not sold that we are done with the negative, but it is not easy to get short into this market right now. Funny - it was impossible to get long just a week ago.
Watch out for profit taking. Wouldn't be a surprise to see selling soon.
Live from balmy Queens,
Everyone is thinking happy thoughts
TM
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