In what could be a turning point for the mkts in general y'day, stocks, and commodities rallied hard while bonds sold off. Maybe the inflation trade is starting to gain traction. In the early stages of an inflation, everything goes up-including interest rates. However, the trick remains to contain inflation before it gets out of control-difficult to do.
Some notes- the GLD and SLV have been rumoured to have loaned out their holdings. As qtr end approaches, the loans will have to be called back as the accountants step in. Could be interesting. Silver starting to outperform gold-maybe a warning sign of a top, or a sign of the long talked about short squeeze. Gold equities starting to outperform the physical, but it is still a way from normal levels.
Oil tacked on 5+ $ y'day to end close to 128. I still think we will see 110-115 this summer (not alone as several oil bulls have pulled back their horns-namely Frank Holmes and the Aden sisters). Oil is statistically overbought, but even the few brave souls looking to short are quick to cover-mainly because they have been burned since the 105 break.
If the inflation trade is going on-stocks are in and in particular real asset stocks. Still avoid financials-more writedowns dead ahead. MBIA and Ambac got downgraded y'day-the spiral continues.
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