Ominous Backdrop Is Keeping Me Short As Long As the SPY Stays Below $127.50.


Yesterday, the market showed some resilience. It was able to overcome early weakness and it rallied throughout the day. Asset Managers that missed the rally a month ago are playing catch up and the bid is strong. Interest rates in Italy and Spain are near their highs of the year this morning. The ECB is not as active in the sovereign debt market as it was a week ago. European officials are slow to act and the EFSF won’t be operational for another month. Italy has €30 billion worth of bonds to auction in the next month and with a passive …

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