Good Morning. Monday is a partial holiday in the US in observation of Columbus Day. Truthfully I studied the CME schedule and could’t figure out what was closed. I suspect simply bond trading, though I believe Treasury futures will be trading. I’m always on guard during holiday trading. The ability to swing equity markets is always elevated.
The next few days are a very critical time for the markets. While small and mid caps are developing downside momentum, the large caps are doing the opposite. The Treasury market is also at a fork in the road. Investors are balancing the inflationary risks associated with QE3 with the deflationary reality associated with a slowing US and global economy.
The only asset class that seems more convinced of direction is that of currencies. They are signaling risk off is gaining steam. So we enter yet another interesting week. A week, that hopefully brings clarity. Regardless of direction, I will gladly accept clarity. Indecision is simply too difficult to trade.