Meanwhile, Lekas said he is still worried about the sovereign debt crisis in Europe. He likened the $1 trillion emergency rescue package from the ECB to "feeding an alligator breadcrumbs."
The “real story” that investors should focus on is the Libor*, he said, as it's moved from 80 basis points to 110 in the last two months and is likely to rise further.
“That’s going to put a lot of pressure on the U.S. government to have to compete with that rate and will probably push the treasury rates higher.”
Lekas also said he sees the Dow falling near 4,200 to 5,000 by the second quarter of 2011.
“This is a short-covering rally—you should be taking advantage of it—and the VIX is back in full force,” he warned. Read more
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