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Up
Yesterday in this note we said, time for the market to decide whether it was about to break down or find support and move up. My own feeling was that we would see some kind of federal intervention because the incessant selling of US Treasuries at a time when the US is under pressure to fund wars on two fronts in addition to its own domestic agenda - and when the House is itself in disarray - was not conducive to the US's position in the world. I was surprised however to see the form of federal intervention, which took two forms (I am speculating, of course, as to any link between the two events or between either of them and any government intent). First up, Nick Timiraos at the Wall Street Journal, a respected Fed-whisperer, posted this:
The implication being, yields spiked in 2007 then fell; yields have spiked now ... perhaps now they fall.
Not long after, Bill Ackman, hedge fund manager by day and New York Fed advisor by night Tweeted this:
And then yields started to fall, bonds started to go up, and equities followed.
A complete coincidence, of course.
So for now, markets did decide, and the decision was, Up.
The Matter In Hand
Let's get back to today and check in on where markets stand.
Paying members, scroll right down for our latest take on markets. As always we look at the 10-year yield, the S&P500, Nasdaq-100, Dow Jones and the Russell 2000; we add Bitcoin and Ether futures pricing for good measure.
Note - to open full-page versions of these charts, just click on the chart headings, which are hyperlinks.
US 10-Year Yield
We may now expect an A-B-C correction. We need to watch the B (up) wave when it comes, closely, carefully, and slowly. If the move up in bonds and equities is to be sustained then the yield needs at least to calm down and not keep spiking higher. A slow drift upwards can be accompanied by equities rising for sure, but my guess is that can only be constructive for equities after the yield has stopped spiking.