Gold/oil moved higher, but priced in other currencies than the US$, commodities barely moved. This points to an imported inflation, which will force the Fed to raise rates faster than expected.
Equities pulled back a little, but money came back in the afternoon.
Both the NQ8 and the small caps were slightly weaker yesterday. These moves are not indication of trend changes.
What I found interesting is that QID/SDS, the two most liquid inverse ETFs experienced similar bursts of buying, as if index investors were suddenly in need of protection. That is the only really bearish aspect of yesterday's activities because this burst might indicate a change in sentiment about risk.
On the other hand, the Vix Futures were sold yesterday.
Conclusions:
The general equities market is still in a buy-the-dip mode. A very weak US$ could however push bond prices higher on expectation of imported inflation. This is not good for fixed assets.
Hence, the rotation from fixed assets into equities will probably continue.
