... on US stock markets and 10-year US Treasury Yields, so who's right? If you believe the unwritten Don't Fight the Fed Rule, then US Treasury Yields would take precedence. It seems this correlation has been going on all year - and not to my advantage.
There's a tiny voice inside of me telling me not to buy yet, but prices are really, truly, beautifully tempting. JPM came out with +13% earnings today and Bernanke has a tendency to follow the banks too. If the banks are consistently posting strong earnings, then it would be difficult for Bernanke to actually launch a QE3 offensive. Perhaps another month or two of a declining stock market would change the story. And the summer months are traditionally bearish. So come September or October, could we get a Grand Home Run Surprise from the Bernankes - even if their batting average is generally poor?
Something is not adding up with my strategy though. If the strategy I've been trading yielded results during the financial crisis, does it imply that I shouldn't trade in the face of a very apparent recovery? I've admittedly changed my strategy since the start of the recovery and most of my risk-on trades led to my portfolio's demise earlier this year. So I might have to go back to basics here a bit more.
The IMF has already started mentioning in almost definitive terms that this is a recovery with a somewhat disappointing undertone.
In the words of 9 Figure Man, perhaps people had expectations that were too high? I know for a fact that had my expectations been lower, I would have most likely had two six figure projects going rather than one that was a high five.
Lessons to be learned... money to be earned!
For now, I'm almost certain that prices after earnings announcement will be similar to prices before earnings announcement. So should I trade it? I think I'm going to half in half out.
C 15 July 2011
BAC 19 July 2011
A string of other banks from 21-28 July 2011 (do your own homework)
-0.39% Roth IRA
-0.29% SBA (influx of cash led to lower decline... I'm most likely trading tomorrow oh oh)
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