Europes's bourses were also higher across the board this morning ahead of the EU summit. I don't think anyone is expecting earth shattering news to come out of the summit, which does set the market up for some disappointment. But if no one has their hopes up, you have to wonder how much is priced in. Remember how worried everyone was about the Greek elections and the markets rallied.
Our markets got an extra boost this morning on the heels of some better than expected economic data. Durable goods orders rose +1.1% in May, more than double the consensus. That also reversed last month's decline in durable goods of -0.2%. Also, pending home sales for May rose +5.9%, far better than the 0.5% expected and another reveral from last months negative figures.
Energy stocks are showing leadership as oil prices bounce back above $80 today. The MLP stocks are up nicely, which is a group that where I think the selling was overdone, especially since many of them have their production mostly hedged for the next couple years.
Gold prices are lower today to $1571, and silver prices are weaker also. But copper prices are higher so far.
The 10-year yield is steady at 1.63%, remaining in this month long trading range between 1.60-1.70%.
As for the VIX, it is back below the 20 level today to 19.60 currently. I don't think it will stay below the 20 level too long, so I am going to start adding back to our VXX hedge.
Trading comment: I thought we would see some window dressing this week ahead of quarter end. Regardless of the news, the bounce the last 2 days have fit the bill. Despite the tepid bounce, I still want to remain defensive ahead of the EU summit which I don't think will produce anything to write home about. Then as we enter July we start Q2 earnings season which I think will have more disappointments than usual in the form of conservative guidance from corporate managements.
KAM Advisors has long positions in VXX
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