- First and foremost - dollar/yen. All roads lead to and from the carry trade.
- All things related to credit markets: commercial paper, secondary mortgage market, junk bonds, etc.
- Gold. Bernanke has effectively told us he doesn't give a hoot about the dollar's value.
- How the stock market behaves Monday - a post expiration Monday. Many folks short going into expiration had to cover Friday which further enhanced the market's rally. The general tendency during the bull phase had been an upward bias to the market in expiration weeks as options market makers were able to unload short futures positions they bought in response to puts they sold in prior weeks. Then, the cycle would restart post expiration where put open interest would build again, forcing the market makers to re-short futures which in turn led to a dampening effect on the stock market after expiration. It will be interesting to see if the bulls really do have a head of steam and come overcome these shorter term cyclical pressures.
- Beyond looking at things like XLF and XBD, more important are individual names like Countrywide Funding (CFC) and Bear Stearns (BSC).
- Fed funds and how far they remain below the present target of 5.25%
- 3 and 6 month t-bill activity
- Hurricane Dean
Just a few things that come to mind along with the 100 other things on my market monitor.