It was a sad day for the world of high fashion with catwalks from Paris to Milan losing a major source of inspiration; Col. Qaddafi is dead.

That being said, the overall market tone in credit felt better again today.

Another player asked this one what prompted the shift in sentiment after a seemingly endless bout of market volatility and skepticism.

While investors have become conditioned to fade risk rallies, a technical "pain trade" (one of the few constants of any market) into year-end is not far-fetched.

Just as the entire market has turned bearish and scaled up their tail hedges in equities, credit, FX (foreign exchange) etc. we could be on the cusp of a technical rally.

To reiterate, the rally will not be based on economic fundamentals.

If it comes, a rally into year-end will be primarily driven by how players are positioned.

Moreover, we may also see the markets in the U.S. begin to bifurcate from the markets in Europe; they have been correlated for too long.

The JP Morgan 4.35 2021 bonds that were re-tapped for $1.75 billion yesterday are closed bid at the re-tap new issue price of +225.

That is a bullish signal considering the size of the re-tap and that it is a financial bond.

On the run financial benchmark bonds such as the Goldman Sachs 5¼ % of 2021, Bank of America 5% of 2021 and Morgan Stanley 5½ % of 2021 closed about +5-10 bps wider underscoring how well JP Morgan's re-tap was received.

The risk-on sentiment is particularly strong with new primary bond issues as they are typically much more liquid and so investors prefer expressing their long risk convictions through new issue bonds.

In Europe, the headline parade related to the EFSF (European Financial Stability Facility) continues with one headline popping up, only to be refuted by the next headline, only to be reversed again by a subsequent headline…

Mixed signals out of Europe are likely to continue but despite that, the year-end technical may begin to overpower for the time being.