Worries in the eurozone has shifted to Portugal, whose stocks have been dramatically underperforming.
All is not lost for the bulls. The Portuguese market is staging a tactical rally and testing its downtrend line.
In addition, Portuguese 2 year yields, which had spiked above 20%, are now in retreat, perhaps indicating that Mr. Market is anticipating further relief from the ECB's LTRO2 program.
That's why I am relatively sanguine about the risk trade. If this is the worst that Mr. Market is worried about, it's time to get long and stay long.
Cam Hui is a portfolio manager at Qwest Investment Fund Management Ltd. ("Qwest"). This article is prepared by Mr. Hui as an outside business activity. As such, Qwest does not review or approve materials presented herein. The opinions and any recommendations expressed in this blog are those of the author and do not reflect the opinions or recommendations of Qwest.
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