Former trader and current man who is going to stay on hold for about another 61 seconds before he rips the phone out of the wall and throws it through a window, Richard Brelsow, is “in a good mood,” on Friday. That’s your breaking news right there.

Richard actually says that in his final missive of week, seemingly confirming our long-held suspicion that “good mood” and “Richard Breslow” are not two things that are often spotted together in the wild.

Well, as you know because you read our last post, Friday is a lot different from Thursday. Everyone (so not just Richard) is in a better mood than they were yesterday (when the world was ending) and the reason for the season is that the Senate passed a budget.

So Brelsow has some thoughts for you on “reading the technical tea leaves” after a “topsy-turvy week” and he also has the following delightfully sarcastic bit to offer about the non-zero chance that something “horrible” happens over the weekend:

And yes it’s true that if something horrible happens this weekend from known or unknown events it will upset the apple cart. I, too, can claim to have warned you if it should come to pass.

Enjoy this, because it’s vintage Breslow – although actually, maybe it’s not, because vintage Richard is never in a “good mood.”

Via Bloomberg

As another topsy-turvy week grinds to an end, it’s probably worth taking a look at what the technical tea leaves are trying to suggest. The answers point to a still tentative but nascent picture of markets that want to test the bullish dollar, higher yields and stop fixating on the equity correction you just know is coming. All pretty interesting given how different things briefly looked early yesterday morning. Or maybe that’s precisely why the noise felt so deafening to new position holders and got the outsized reaction.

• These can be silly markets. And therefore require the most discipline. This time yesterday all eyes were on the Hang Seng index. It was kind of funny listening to commentators who don’t cover equities, let alone Asia, analyze everything China and Hong Kong related to explain the move and what it means for the future path of global asset prices. And even more amusing to watch precisely the same stocks that led the down-move be the source of strength during today’s rebound. It’s a good object lesson and all the more reason to stay close to your charts
• And yes it’s true that if something horrible happens this weekend from known or unknown events it will upset the apple cart. That’s not a prescient insight, just an NSS comment, that is of no value for trading purposes. But I, too, can claim to have warned you if it should come to pass. Now, ignore the above and put on trades that you’re supposed to.
• Before getting to the charts, because it’s Friday and I’m in a good mood, I can’t help but giggle over the fact that as the nomination of a new Fed Chair looms we hear that it’s supposedly come down to a choice between two candidates who are perceived as polar opposites. That’s some strange way to have a plan
• The absolute level of Treasury yields are still very much in the sewer, have been threatening the downside all week and are now attempting to go out on the highs. That’s powerful and, meanwhile, the tight ranges of the last three weeks have let the technicals trace out a pretty well defined floor with the moving averages becoming much more constructive. What we have here is tempting risk/reward
• The dollar picture is looking somewhat more ambiguous than bonds, but it’s measured against a lot of other moving parts and the dominoes are gradually falling. We have election risk this weekend in Japan. The yen is going into it looking like it wants to fall further, which in the context of the issues at stake implies the market-friendly expectation. It’ll be interesting to see if Japanese pollsters are any better than their peers elsewhere in the developed world
• Equities keep doing their thing. If it’s too painful to watch, stop looking. But peek through your fingers just to make sure they stay above the 21-day moving average
• A trade is just the making of an educated guess. Which is why you need to know going in where you intend to be and where not and what you’re hoping to get out of it. None of it makes you a good or bad person.