For those of you awake, sell SPX (ES) at 1379. Cover yesterday’s long set at 1374.5 AND set a short.
So go from long SPX to short SPX (will send a summary of current trades on later this morning).
Strength in U.S. stocks makes little sense to me with Spanish and Italian bonds selling off. The best explanation I have is that some people who were forced to use S&P futures on Friday and Monday to put on shorts are shifting back to more natural shorts (so they are buying U.S. and shorting Europe).
In any case, it seems to good to be true, so that is trade idea of the morning (so far).
Looking at either adding Italian CDS or covering Spanish 10yr – trying to get a sense of the next leg.