Mid Day Update and a #mustread from Zerohedge
SP500 spikes then late dump = Bearish
Before we get to the markets, we had to share this Zerohedge article. We know repo and short term funding ins’t widely understood, but rest assure, it does effect the markets. When liquidity dries up and funding needs show up, generally we will see them in the overnight swap spreads. If you don’t follow Zoltan Pozsar’s work, you should. Anyway give this Zhedge article a look, Zhedge$700Gorilla
Ok now to the SP500, as we noted yesterday the equities have dropped precipitously but in no way are they out of the woods. They have come so far so fast that we can’t help but say, caution to any dip buyers. Rather and we know its hard to do, but have a more defensive tone to entries as it still seems like spikes will be sold rather than dips be bought. Slippery slope some might say and if the SP500 should close below 3000 in the June contract, then this will open the door to further downside probes and most likely target 2935:
-Magnelibra Econemotions
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