• 168 days Will The ECB Continue To Hike Rates?
  • 169 days Forbes: Aramco Remains Largest Company In The Middle East
  • 170 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 570 days Could Crypto Overtake Traditional Investment?
  • 575 days Americans Still Quitting Jobs At Record Pace
  • 577 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 580 days Is The Dollar Too Strong?
  • 580 days Big Tech Disappoints Investors on Earnings Calls
  • 581 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 583 days China Is Quietly Trying To Distance Itself From Russia
  • 583 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 587 days Crypto Investors Won Big In 2021
  • 587 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 588 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 590 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 591 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 594 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 595 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 595 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 597 days Are NFTs About To Take Over Gaming?
Mike Paulenoff

Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com, a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies,…

Contact Author

  1. Home
  2. Markets
  3. Other

Bond Vigilantes Pounce on Prices...While Considerably More Upside Still Left in Equities

What a week! My sense is that the watershed event that occurred was the plunge in the bond market (climb in yield), which I suspect is the beginning of a relentless back-up on the long end of the curve in response to the "inflationary" environment exuded by equities and commodities that has resulted from the constant creation of money and easy credit for years.

In other words, up until this week, it seemed to me that the bond market was reacting to evidence of waning growth in the U.S. more so than to domestic and global monetary and goods inflation.

Perhaps not so anymore, however. Now the bond vigilantes may be poised to pounce on prices to elevate yields to the "ouch" point of equity investors. Where that is, who knows? But for sure it is much higher than 4.80%.

For the immediate future then, equity prices still have room for considerably more upside... as evidenced by the long-term weekly chart of the SPX.

The incredible upmove off of the March pivot low at 1363.98 continues Ð- to new recovery, intraday, and closing highs at 1522.75, and just 1.9% from testing the March 2000 high at 1552.87!

Based on the weekly chart and various measurements off of the lower base formation(s), the SPX projects beyond the 1552.87 into the 1570-80 target zone, which is ÒonlyÓ 3.5% from todayÕs close.

If the SPX Òmelts up,Ó then perhaps we might see a classic blow-off of, say, 10%, or to a target of 1650-1675. Who knows? Right now this is one very powerful advance that shows no signs of wavering. Only the back up in 10-year yield gives me pause, but at 4.80% yield will have to race higher to put the kibosh on equity investors.


Back to homepage

Leave a comment

Leave a comment