The markets are continuing to get interesting. I’ve been slightly nibbling on some picks on the watchlist lately, but still am holding most of the portfolio (80%) in cash at the moment. The so-called “risk-off” trade is winning big-time: 10-year US treasury bond yields have cratered to a amazingly low 1.46%, 30-year bonds closed at 2.54%. These are really, really, really low yields. It is the bond market betting on seriously bad economic times ahead.
Commodities (except for gold) continue to plummet. Another notable is that spot crude (WTIC) at $83.23. This is still not near the lows seen in 2011. The S&P 500 and Nasdaq still are trading above the levels at the beginning of 2012.
I still don’t believe that we have seen “the bottom” of this recent market malaise yet. There is not yet enough volatility. There’s a bit more action on the downside yet to occur, but it would pay to hold onto that cash stack and be able to hit the “buy” button on some issues that have had panic liquidations.
It is when I start seeing price responses consistent with panic liquidations that I start to salivate. While I have seen some hints of this on the equity side of the market, I haven’t noticed this on the bond side yet.
Hold fast! Things will continue to get more interesting.