Bond market seems to think there will be inflation/better economy down the road. 10 back to 5.28%. The market has already raised rates for the fed, but if these numbers keep coming out like this, hello 6%. That will make housing completely tip over. But, the equity mkt seems to gloss over these numbers. We go higher until either rates get out of hand or the random outside event takes place.
Michael: I for one think your comments are VERY astute. Yes, rates are going to be higher by year end. Sharply. However stocks may disconnect from rates in a big way over the summer. Ala' 1987. In this post 2002 cycle, equity traders have been WAY MORE nervous about deflation/recession than a spurt of inflation. To wit: crude is on all time highs and so are stocks. The chicken's will come home to roost. The perfect storm for stocks was the combo of explosive growth with historically low interest rates. The rate scenario is turning. I'm still looking for an ugly last third of the year but I'm staying away from the short side (of stocks) until August.
All I can say is that inflation is far from tepid. If you have ever worked with reports and things of that nature, you know they can be easily manipulated. Im sitting here looking at gas at 3.25 and then go into the store seeing 6 dollar a gallon milk. So many more examples. I feel like I am married right now to Bush and this is the time before the big divorce where the real mistruths get told. Is inflation one of these mistruths?
Here is part of my master TNX chart. There is an obvious reverse head and shoulders going on in the chart which will place the ten year yield up towards the 2000 highs somewhere in the 6s if there is a break of the neckline.
Michael you worry too much. If buy and hold is not your thing, there are other vehicles that may match your temperment. Grow up or at least lighten up
Elitetrader.com is just that...its about trading. So you have many traders on this website and traders tend to be like fighterpilots where you have some immaturity, strong opinions and high emotion. In any trading forum, your going to have a lot of that, thats to be expected. However, the "buy and hold" style that some bandy about on this website is not really trading. I do have many stocks that I hold in DRIP plans with many different companies that I never cash out of. Thats buy&hold, thats investing, but thats not trading. So to those who want to buy and hold the good stocks, I say to them that you are in the wrong place. The right place for you is sites like www.valueline.com and http://www.mergent.com. Also IBD and quite a few others. Elitetrader is about the fun stuff. As for the markets, they are turning just like I thought. The DJ Utility index keeps going south, oil keeps climbing, interest rates keep climbing and the indexes keep chopping to the downside. By the way, the Mergent's Dividend Achievers list is the best place to park your cash for the long term. Another good one is the DVY. I usually just send a check out to buy some new shares in a random company on the achievers list at least once every quarter.