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Two Ways: Bond Market Shows Fear


Strengthen your portfolio in good times and bad.

The US stock market may be having its sharpest gains for the first six months of the year since the Great Depression, but bond markets aren't sharing the enthusiasm. According to Bloomberg, investors aren't convinced of a strong recovery, and are seeking protection in bonds, pushing yields on government debt to the lowest levels since April.

Merrill Lynch's Global Sovereign Broad Market Plus Index, a gauge which tracks $15.4 trillion of bonds worldwide, gained 0.73% this month, the most since March when it gained 1.02%.

For more on the markets, see Professor Vinny Catalano's Four Ways to Beat the Market.

From the Bull Pen: If you believe in the long-term picture of the foreign markets, the scary selloff last night in China is offering an opportunity to average in. Consider adding a small portion to the Morgan Stanley China A Share fund (CAF). For those with a shorter time frame, a sell stop can be set below $29-30.

From the Bear Cave: If a correction is in the works, those bearish may want to consider using puts on the S&P depository receipts (SPY). Watch out for "Turnaround Tuesday" as nonsensical as it may be, and remember to set a buy stop (around 103.40-103.50 may be prudent).

Quick Check Around the World

Asian trading closed with the Nikkei -0.40%, India -1.61%, Hang Seng -1.86, Shanghai -6.74%, and Taiwan 0.24%.

Across the pond, we see the FTSE (Closed), CAC -0.68%, DAX -0.68%

As of 8:10 a.m. EST, S&P Futures are trading +4.75 to 1034.00 and Nasdaq futures are +6.75 to 1645.75.

A Look at Commodities

Over in commodities, crude oil is trading -1.27 to 71.47 while gold is -2.60 at 956.20 this morning. Silver is -0.084 to 14.70 and copper -4.500 to 287.80.

The dollar index is +0.1650 to 78.5500.

On the Radar


09:45 Chicago PMI 47.2 cons.

Click here for the full trading radar.

Welcome back, Minyans! Good luck!
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