The market reversal this morning could be important from one standpoint – throughout the morning the credit metrics we have been highlighting have held steady, even when there was weakness in the equity market.  U.S. Treasury Yields are a touch higher and the U.S. Treasury Yield Curve is a bit wider suggesting the “risk off” in stocks was not translating to the bond market.  One hour clearly does not make a trend, but this is the kind of action we want to see.  Remember our plan is not to become more offensive at any “level” in the market, but to become more offensive as credit acts better even when equities are pulling back.

I want to reinforce very clearly, our plan is to not bet on downside, but to get more offensive as stocks pullback and credit acts better.  We didn’t want to chase huge upside to near S&P 500 (SPX) 3000, but the market is already back to the 04/09 Fed decision to buy various areas of High Yield and municipal debt, which seems like a good place to have a good old fashion bull-bear battle.


Past performance is not a guarantee of future results. Index returns are unmanaged and do not reflect the deduction of any fees or expenses.

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