Friday Macro update on major markets.

Going into the week-end long RISK-OFF optionality. Model is only involved in two major themes right now:

1. Short Fixed Income - but like this for a while... market is too long QE2 risk, banks loaded w. POMO and liquidity is starting to lose on the core positions - Stop/loss city close by? I do not know, but if 3.00 pct goes in 10 yr we will see fast and furious move to 3.50. Bottom line: 60 year down cycle(60 yrs rates cycle) in rates is coming to an end in 2010 and maybe early 2011, but prepare yourselfs for higher rates now!
2. Short JPY  - Model is short JPY vs both USD and EUR. We remain with USD long vs JPY due to the first macro view.......the risk being the weaker JPY is counterintuitive to our main scenario which is a slow move towards crisis 2.0

Then we have a sell signals in other major markets:  Gold, model sells 1330-00 close on daily and Crude, model sell at 80.00 on daily close. 

Chart update speaks for themselves:

S&P: Warning signal triggered last week. 1150.00 line in the sand. Close tonight also of importance, post the Bernanke speech et al. Failure to take out 1200.00 on close very disappointing, and overall as long as below 1220.00 we can not be long

10 yr rates: Break of channel. Next level is 3.00 pc - critical. Market very long FI here.....

Gold: Sell signal as stated. Meaning: Out of gold and neutral - break will take us further down.

Nice weekend