Is This What Sent Stocks To A Record High This Morning?
Many are confused this morning at the exuberance in US equities after dismal data and a bond market that is barely budging. Of course, the answer lies deep in the fun-durr-mentals of the JPY carry trade... but this time it's different as it would appear a note from BofA proclaiming "it's time to buy AUD" coincided perfectly with a ramp in AUDJPY and thus - new all-time highs in stocks...
The BofA note:
It's time to buy AUDUSD.
AUD/$ is set to resume its bull trend. The almost 2wk old contracting range/Triangle is drawing to a close. The impulsive gain from the 0.8658 Jan 24 low says upside targets are seen to the confluence of resistance between 0.9269/0.9338. Further supportive of the bullish view is the potential for a short squeeze, as positioning remains at bearish extremes. Pullbacks should not break 0.8936 and can't close below the 50d at 0.8903.
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