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Risk On? Not Until Treasurys Stay Above 2%: Terranova
10 Jan 2012 EST - CNBC.com
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If you follow technicals, chances are you’re all bulled up. The S&P 500 closed above its closing high hit last October, something pros are calling a technical breakout and the pattern could spark more buying.

But according to trader Joe Terranova, even if that happens, don’t take the gains out as a sign of full out ‘risk-on.” Terranova says that would be a mistake.

“What’s happening in the market is – people are getting less defensive,” he explains. “Into the end of the year, investors were very cautious.”And although he thinks in the near-term there could well be a chase for performance if you're a long-term investor Terranova would not dive into the market head first. “Not until I see the 10-year stay above 2%.” he says.

If and when that happens, Terranova would consider the higher yield a sign that money pros are really embracing risk by rotating out of Treasurys and into equities. But not before.

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