The market is struggling at the April highs much like it was at the faulty peak in October 2007 as it failed to build on the prior July highs. The fact is that in both October 2007 and again in November 2010, the test of the highs was not confirmed by the financials. Remember that...
We are long-term bond bulls but some technical damage has been done. It looks like a complete reversal can take the 10-year note yield to 3%. The long bond reached a key technical juncture yesterday breaking above the 200-day moving average, at 4.24%, which could take the long bond to a 4.6-4.8% and the stock market will have a good dose of trouble with that. But what a buying opportunity that would be for the long end of the curve, which is cheap, cheap, cheap, especially relative to where the cost of carry is. [source]
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