We just received confirmation concerning the Asian trade. In the last several weeks we have been bullish on Indonesia, Malaysia etc. Other markets such as China, South Korea, and Thailand were in a grey area between bullish and bearish states. These markets have just transitioned into a bullish state while other markets such as the US and Europe have transitioned to a bearish state. The last of the Asian markets to transition to the bullish state now confirms the Asian trade is on.
What about the US? US government bonds are bullish however, the US equity market is bearish. But not bearish to the point of another financial crisis. The US is still considerably under its crisis threshold. However, investors are fleeing to some safety resulting in a bullishness of US government bonds. These results mean the market is not worried about US default. However, the long-term consequences are bearish for the US market.
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