The Mammoth sector is still attracting money.
Yesterday, US rates weakened somehow, which helped Treasuries, but gold too.
It is interesting to see that Japanese rates are still moving higher. The Japanese market tells us that Japan will need to borrow more in order to fund its deficit and invest in US infrastructures (through their pension funds.)
The BOJ might intervene to cap interest rates, but they would need to print more Yen, which is a poor idea ahead of what will be a difficult negotiation with the US regarding the trade balance.
The US/Japan rate differentials is getting weaker now. This is market bearish, but the down move is still limited.
In this context, the US$ wants to move higher, while the Euro is rather weak. I think that this is the natural move that we should expect under the "Trump inflation" push linked to the growing elections uncertainties in Europe.
Conclusions:
I can hardly say where the market will move from here.
I am 60% invested on the long side: JNJ, CRM and PZZA, with some call options on VRSK that I intend to keep through earnings.
Both CRM/PZZA will publish earnings in the next two weeks. I do not intend keeping the positions through earnings. TWLO (same sector as CRM will publish earnings tonight.)
JNJ still attracts money probably because it is in all existing health/drugs related funds/ETFs. This is indiscriminate buying, which is fine with me.
POT, MOS and CF display an interesting positive EV pattern (not shown here.) I almost bought POT yesterday, but I have the feeling that I am "too long" the market for now at the current valuations. I am more in the mood of "buying protection".
