The passage of the tax bill, albeit reckless, is sure to help buoy equity prices in the near-intermediate term. It is HUGE. However, the bigger story is the ongoing COLLAPSE taking place in the bond market. PPT subs, take a look at The Risk Appetite Index. We are approaching “Flash Crash” levels of panic and equities have no budged. Why?
Answer: the money is finding a home in stocks. That is the only logical reason for the vast disconnect. Granted, borrowing costs are going up; but they are hardly punitive. Do not discount the carnage in the bond market as nothing, for it is the apocalypse for fixed income players. Remember, they have nowhere to go, due to the Fed’s zero rate policy. Moreover, corporations need to think about alternatives to Treasuries, such as other companies that are publicly traded. Perhaps this is the intend of the Fed? Who knows.
All I know is what I see. And I see dead people in bonds, while young fuckers pop champagne bottle long stocks. You must admit, the transaction is taking place in a very orderly fashion.
In short: buy stocks, get drunk, and do something special.
Top picks: REXX, EXK
Fig
Fly post this to explain equities vs bond correlation, these retards read pictures better than words http://mrtopstep.com/wp-content/uploads/2010/12/SPY-TLT-12.15.10-Record-Spread.jpg
fwiw, that spread will make many, many new records as time goes by. many, many
By the way the Arm Index is going to extremes on the overbought.
Can GMCR be one of your top picks?
Just for that The V.King Trust has just BOUGHT a copious amount of a S&P 100 index fund…I would tell you a dollar amount but most would not believe it….
oh by the way….first
You’re right we would not believe it.
That’s because he brags about how much he bench presses. He can’t be trusted with numbers.
Treasury selloff is done for now…MUB rallies.
Higher bond yields will soon become a threat to stocks. If the 10 year gets over 5% hopping into bonds at cheaper prices will start competing with stocks that look grossly over valued.
I think you are on the money for now but this trend could violently reverse because the demand for safe havens with a higher yield is so high.
agreed
CD rates are getting close to 3% on a jumbo 7 yr.. John Q Public wants a reason to pull out of the market, if in fact he is even in it…I think if we see 3% on a min 5k for 1 year then katy bar the door…
I think iyr will suffer the most too… Yield chasers will dump em..
Moving people along to riskier assets is exactly one of the Fed’s goals because it allows corporations to increase capacity and affect an increase on resource utilization which puts the armchair sudoku fidgets to work.
BUY SHARES!
http://www.telegraph.co.uk/finance/personalfinance/investing/8202251/Investors-told-forget-savings-accounts-think-of-shares.html
really, after an 80% run in the stock market people think now is the time to buy stocks? at some point yields will become attractive .. personally i think they are just over shooting on the downside like they did on the upside but will end up somewhere in the middle
REXX looks ready for fresh 52wk highs… h/t @Mr. Fly
R.A.I. makes me want to short FFIV and OPEN
i tire of this. this market is on vacation. do the same.
only problem is that the bots don’t take vacation
OEW Synopsis:
“The market has pulled back 13 points thus far from the SPX 1247 high. Minor wave pullbacks, during this uptrend, have been more than 20 points and the daily MACD has declined to at least neutral. Anything more severe and we’re probably dealing with a Major wave 2 correction, and not a Minor wave 2 pullback.”
“The next significant pullback should be quite important for this uptrend, which is already into its fifth month. Should the SPX break below the mid-1230?s a pullback is likely underway. Then, if a break below the OEW 1222 pivot range (1215-1229) occurs the uptrend is likely in jeopardy. On the upside, a breakout above the OEW 1240 pivot range (1233-1247) would likely lead to the next pivot at 1261.”
So dude has laid out a range from 1215 to 1261. Ok, way to go out on a limb there chief.
Hey, smart guy … he’s telling you it’s safe to stay in as long as we stay within those parameters and we go higher if we break out from 1247 and to get out if we breach 1222 cause a major correction would be confirmed. Go ahead, keep driving with those blinders on, douche bag … what have you got besides your white stick and MA’s on a chart to keep you from walking into an Acorn office for a loan and tax advice Po?
PS: Undercover scam courtesy of Fox News
The scam was the one being perpetrated by your scumbag ACORN Obama-buds. Sorry for your loss.
___________
No interest in Acorn … sorry to deflate you. The real story is the fraud perpitrated on the public by Fox to attack their opposition … what the conservatives won’t do to brainwash the uneducated so they can retain their tax cuts … pitiful!
very enjoyable post and comments… thx!
TBT holding above it’s 200 SMA is death to bond bulls..
Posted a few charts.
http://www.chartingsense.blogspot.com/
” Do not discount the carnage in the bond market as nothing, for it is the apocalypse for fixed income players. Remember, they have nowhere to go, due to the Fed’s zero rate policy. Moreover, corporations need to think about alternatives to Treasuries, such as other companies that are publicly traded. Perhaps this is the intend of the Fed? Who knows.”…
Good point.
Strange as it may seem, I think that is EXACTLY what Ben the Bearded Clam is trying to tell everyone.
“Go to stocks, young man. The profits you make from trading like a degenerate gambler will enable you to go buy shit. That goes for you old Ma and Pa Kettle f*ckers, too”.
See, Ben has our best interests at heart. He will win TIME’s Man of the Year in 2011.
Vix nears low for its third time in 5-year (think late 2008 & May’s flashcrash). Has this bond account priced this in?