Why no sell off?
- Thread starter kashirin
- Start date
The reasoning is quite simple:
Higher bond yields = demand for capital is high from businesses and consumers = economy running full steam ahead = extremely bullish = higher prices in equity indexes to come = more $$$ for all longs
Should yields go down then it goes like this:
Higher bond prices = lower capital costs for businesses = more cheap money for LBOs and PE = higher prices in equity indexes to come
You see no matter what the news is, the markets go whatever way the highest amount of capital pushes it towards. Forget the news noise. Look what the markets do.
Higher bond yields = demand for capital is high from businesses and consumers = economy running full steam ahead = extremely bullish = higher prices in equity indexes to come = more $$$ for all longs
Should yields go down then it goes like this:
Higher bond prices = lower capital costs for businesses = more cheap money for LBOs and PE = higher prices in equity indexes to come
You see no matter what the news is, the markets go whatever way the highest amount of capital pushes it towards. Forget the news noise. Look what the markets do.
We are approaching a critical resistance level on SPX. If it doesn't break then I expect 30 point drop within the week, accompanied by 10-yr yields dropping back below 5%.