Wall of Worry Crumbling

The market looks unstoppable.  The future is so bright, gotta wear shades.  The slow crawl higher continues.  We no longer have to worry about Greece, at least for several months, which is forever in this business.  Then we have ECB QE set for launch in March, and then we had Yellen yesterday calming the market that the removal of patient in the Fed language doesn't mean an imminent rate hike.  In other words, Yellen just gave herself an excuse to keep rates at zero forever, while maintaining their "credibility".

Based on this kind of Fed, with rate hikes delayed perhaps forever, the dollar rally is on its final legs.  I am getting more and more interested in getting short USDJPY.  It is lagging the Nikkei, and the S&P.  Currencies are much more mean reverting that equity indices, and there is no dividend that you are charged for holding a short.  So on a fundamental and historical basis, it is just better to short a risk on currency than to short stocks.  Plus the yen is extremely undervalued relative to the USD, more than the S&P is overvalued.

Sentiment is now pretty bullish, not overexuberant yet, maybe we get that when Nasdaq breaks 5000.

Treasuries have rallied strongly this week, I will be looking to short Treasuries soon, looking for a move back up to recent yield highs of 2.15% on the 10 yr.  Looking for more boring trading until the crap hits the fan in March.