Dollar up, oil up, treasury yields up, stocks slightly off, PM’s flat – sure, why try and make it consistent. It’s a non-linear world we live in folks. Get used to it.
Your market correlation models are getting blown to pieces this morning, as the movements reset. Really, yields can’t correlate with markets forever; sooner or later the transient correlations lead risk exposure by the halter to unsustainable levels. Blow ups follow.
I see no reason why markets can’t selloff even though yields are pushing up. With treasuries so inflated, they will be prone to massive directional moves that might belie the rules of thumb of “teeter-totter” purchasing patterns. I mistrust those who say otherwise.
Interference in markets from the huge players has primed the classical views of markets for disconnection. Especially at the turning ranges, things are prone to get very weird.
Personally, I’m not ready to completely abandon the market rally just yet. We haven’t confirmed the move in any direction. But I have raised a cash stake, which I will guard jealously. And when the rally is finished, I all but guarantee anyone trying to use a purely correlary approach to defining the turn will be left for dead.
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