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Weak

|Includes: LQD, TAN, TBT, iShares TIPS Bond ETF (TIP), TLT, TSLA
The Tape

That was the word that came to mind with this morning's bounce/fizzle.  There are quite a few out there that still feel this is a bull-market correction, but trading like this should  go a long way to peel back the veil.  There is simply no panic.  This feels more like a nascent bear getting underway, or (if you are in the '08-'10 retracement camp), a bear resumption.

The Tickers

Money continues to pour into fixed income ETFs (TLT, TIP, LQD, etc).  Nonetheless, they are probably due for a rest soon, which could suggest some choppy, unmotivated "back-filling" for riskier assets, i.e. the stock market at-large.

I continue to love shorts among the "Ultra" ETFs, and along those lines, I feel the TBT (Ultra Short  Treasury 20+ Yr) remains a decent short/re-short around 37-38.

Investors who are insistent on keeping some portion of their money in growth should consider scribbling out a "futureworld" basket of equities whose glory days are more likely to be delayed than destroyed by economic relapse.  Oddly enough, the Solar ETF, TAN, appears to be carving out an interesting pattern divergent from the carnage.  For those still hunting over-priced "gems" like TSLA, perhaps take another look at it when its under $10.

The Tack

Whereas during the '08 financial crisis, many fixed-income ETFs performed the counter-intuitive "implosion" imperative, we are seeing them act as they should this time around.  I do not believe that those seeking safety in the aforementioned ETFs are making a mistake, nor inflating another bubble.  Chasing relative yield while the market makes a hamburger mess out of the 2009 stock rally seems more than prudent.


Disclosure:  author and/or his clients maintain long positions in TIP, LQD, and short positions in TBT.