Point of disagreement. I would think the long bond decoupled perhaps 10 days ago from the stock market.
A better track, currently, is Bank stocks. Note the intraday pattern and the divergence from bonds yet lockstep with BKX is apparent.
Bonds decoupled as a result of flight to safety, which in reality, is not safety at all.
The snapback rally today could return to the falloff from 1110 SP8M, a position which would ensure a sense of security amongst those of the permabull persuasion. This barrier shall be frustrating, in my view, to surmount.
The late rally puts bulls at more risk, as the perception that markets may only correct for a day or two will certainly disable a permabull and place them at more risk.
Of the 11 times markets opened higher this month 7 sold off by the close, including the 3 biggest losses. This is in stark contrast to bullish environments. 1995 was the most bullish year in decades for stocks and the market continually opened lower and finished higher.
Anyway, Labor Day is 3 months off. |
