The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Paul Kern who wrote (82710)	6/14/2007 10:26:25 AM
From: Rarebird	Read Replies (1) of 110194

>>While inflation remains a risk, it doesn't appear to be taking a significant hold in the economy.<< One should pay attention to the market's reaction to the news and not the news itself. The news itself (i.e; PPI, retail sales report) said that inflation is a growing problem (it certainly is), but the bond market quickly changed its mind about that news and that's the signal you should pay attention to. The recovery rally in bonds -- which is no more than an intermission within a longer term bear market -- has clearly helped stocks short term. But given the overall trend (down), probability favors another day or two of consolidation at most, and then a continuation of the downtrend. At this point, stocks are slaves to the bond market.

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