I knew it…

was probably something many uttered ruefully to themselves when coming in this morning to find world markets down across the board. Bonds rally, oil down in sympathy with equity markets and risk currencies sell off; the standard response. The market didn’t have last week’s rally and still struggles to believe it. Unfortunately, many were forced to cover shorts and the subsequent fall in markets, although it may have provided some intellectual satisfaction, probably didn’t deliver much in the way of P/L.

However that’s not to say this market is on a definitive downtrend short term. Volumes, while not paltry, are light. They’ve been running about 70% this week having been around 130% last week, and as a result the Tape looks like it’s being pushed about relatively easily. And given the move from the lows in market this morning, maybe that “I knew it” is being reflected upon and thoughts turning to “Actually, maybe I was right to cover.” Bottom line I think, is that conviction is low at the moment, there’s a lot of tick watching and as I said the other day, some top and tailing going on.

It feels like we’re treading water at the moment, waiting for the earnings season to really get under way and the Easter holidays to get out of the way. I would be doing…not very much for the time being. Trying to second guess the market can be particularly costly these days, as can conviction. It’s quiet at the moment, beware the Boredom Trade.