Let's Call a Meeting

One of the most counterintuitive aspects about speculation is the concept of laying off the action.

The very idea of traveling to the casino only to force oneself to not gamble seems absurd--After all, what is the point of going anyway? Well, some days the poker table is full of only tough players and/or your cards are running cold. And some days the stock market is flopping around like a goldfish taken out of its bowl and placed on the countertop. 

In the face of AAPL and FB earnings rallies (FB is still up nicely as I write this, while AAPL is back to flattish), stocks are working through another sloppy opening ninety minutes or so. While small cap energy stocks came out of the gate hot, they are up several days in a row now and we have CVX XOM oil leaders reporting earnings tomorrow morning.

While I still have high hopes for "hated" reopening trades like the shopping mall space (JWN MAC, etc.) this also seems like a good spot to tread carefully insofar as taking on new risk into the end of month tomorrow. 

As for tells, rates continue to be a common denominator. On the TLT ETF daily chart, below, you will notice the five-week bounce or so (meaning rates went lower). Should Treasuries roll back over and a new spike in rate materialize, it will become a problem for The Fed by the time we reach the next FOMC in June, since the market would be front-running The Fed and squeezing them to tighten sooner than later.

Thus, after cooling off since March, Treasuries are back towards the front of my scans as being a meaningful market barometer headed into May. If we crack below $136 on TLT would probably bring me into a short, thereby betting on higher rates.