Summary

• The week began with a spike in volatility on Italian politics, then again on Thursday on trade war fears
• Stocks remain resilient, firming up Friday with the solid employment numbers
• S&P500 continues to trade in a 40-point range, stuck between the 31.8 Fibo on the upside and the 100-day on the downside
• Italian and the euro periphery bonds rebounded sharply after Monday selloff
• Brazil and Mexico 10-year yields up 37 and 20 bps, respectively
• Corporate credit a bit weaker
• Latin currencies weaker
• Dollar index (60% Euro) flat
• Turkish lira recovered slightly
• Global equities flat to weakfish
• NASDAQ and U.S. small caps continue to outperform
• Banks weaker and may be worried of spillover from Europe and decline in Deutsche Bank shares
• Crude oil weaker

Upshot:  The U.S. stock market wants to trade higher but being buffeted by tighter U.S. monetary policy and the gathering macroo swans.  Strategy – Rental longs only with strong predisposition to sell and short at higher prices.  Could get a nice run to 2800 if the S&P500 breaks above 2743.  Patiently waiting for the break.