The Global Perspectives Update team invites your comments here on our latest GP Update video for Februrary 8, 2010 with Pastor Timothy Neptune and Steve Meyers.  This week's session is titled "Market Correction and Risk Analysis".

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Market doesn't act very good. Anyone who took the short treasury trade, just put in a breakeven stop in case we get a sharp equity selloff. We then can hopefully reenter closer to the 120 area. (if we get stopped out)

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Nothing exciting today. We ran up to resistance and pulled back. Breadth of the market and volume never got rolling. If we sell off this p.m. then we could get that last low before a recovery into option expiration week. Keep your eye on euro. it rallied and everything rallied, it pulled back and everything pulled back.  It's nothing sophisticated.

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All markets rebounded late Friday, which prompted me to examine the best trading strategy. If we get off to a good start Monday then I think we can rebound into option expiration which is Febuary 19th. They have used option expiration week to drive the market higher so this coming week is key. We have picked up most of the move on the downside  so booking 1/2 of the positions and leaving 1/2 on is not a bad strategy. Surprises will be to the downside and we would still have positions on if we do get a negative surprise. If we get a rebound then we can put 1/2 on at a higher price. I think the high is in but we are going to initially see a lot of back and forth trade. Shorting treasuries into the 19th looks to be a good trade as well. I am looking to short the 30 year for a 2 week trade.

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The January NFP number came in at -20,000, a mere 5k away from Goldman's -25,000 estimate. Consensus was for +15,000. December, as all prior months, saw an expected major downward revision to -150,000 from -85,000. The January Birth/Death adjustment was for -427K from +25K in December. Despite a deterioration in every metric, the unemployment rate dropped from 10.% to 9.7%, even with a consensus at 10.0%. A glitch in the excel model is further corroborated when one considers that the civilian labor force participation rate actually rose in January from 64.6 to 64.7. READ MORE

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Please.... we all knew lipstick was going to be applied to the pig today but we got a total makeover (lipo, botox, lobotomy). We probably will get a dead cat bounce that will be sold but longer term I believe the high is in and we need to error on the short side. What we are seeing in Europe is a mild preview of what's coming to our shores...soon. Shut off CNBC and all the morons they recycle who told us everything was fine all the way down the first time.

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We've been talking about sovereign deb for a long time now, but it feels like we're tipping over today, and that the very real matter of countries defaulting on their debt is starting to get serious attention.   

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