If it makes or holds any 5.6% yield , I don't buy his Thrust on any
S&P, the little investor may pile in on the small caps as the
pundits are beating the drums on them, but if that yield goes up, and you see the big caps pull back, and the index climbs thanks to the smaller caps, then you have the set up for the mother of all down turns as if small caps go on to support the index, when they try to get out all hell breaks lose.
I think most money managers have got wise to this, and that's why
the small caps are dragging, they want liquid.
I never fight the yield curve, the bond market is huge compared
to the equity market. Hell the yield curve changing fast is
a sign of a reversal in equities, the longer it takes the more
the reverse. Not only that as the yield goes up the dollar
will gain, and some foreign investors are itching to get out
of stocks if the dollar comes back, all that Fed intervention has a backlash, that will in time come home.
Japan tired it and you see where it got them.
Don't get me wrong I'm not bearish yet, but I do have caution
flags up all over the place. The market is still liquid and I don't
see a melt down, but I do see things that could set it up, while
they have not happened, but if they do I won't be blinded by the
pundit's, I called the July down turn 4 days in front of it.
and went back long Sept 4th.
Jim |
