UST MORNING CALL: Market to Trade in ‘Choppy, Reactive Manner’
(Bloomberg) -- Friday’s price action “reflects a market that is going to trade in this choppy, reactive, manner and demonstrate little follow through but catch short-term positions on the wrong side and squeeze those accordingly,” CRT strategist David Ader says in note.
- “We see the bullish stochastics that are in place in the front-end of the curve beginning to curl from decidedly overbought conditions –- a move that is consistent with the sector’s early underperformance”
- Other observations from strategist morning notes:
- BMO (Aaron Kohli): “There may be a deleveraging process that has already started in some part of the markets which may be more prone to further correction despite the immensely positive impulse”
- “Whether we have passed the tipping point for such an event could well dictate the extent of any risk on moves in the coming weeks as well as the amount of time it takes markets to respond to the dovish Fed messages”
- FTN (Jim Vogel): “Unlike the first quarter when investors were afraid of rates falling further, buying now reflects the observation any rate increases in the next 2-3 months will be manageable”
- Marty Mitchell (independent): “10dma is crossing above the 30dma on the 10yr this morning and prices are above the moving averages. Those two factors indicate that buying on dips down to moving average support is the preferred strategy”
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Aaron Kohli (Bank of Montreal)
David Ader (CRT Capital Group LLC)
Jim Vogel (Ftn Financial)
Marty Mitchell (The Mitchell Market Report LLC)
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