Dear Money & Crisis Reader, Was that it? Stocks are roaring higher again after a brutal week last week. The S&P 500 came charging out the gate first thing Monday morning and never looked back. As I write this Tuesday morning, the S&P 500 is just below major resistance (red line in the chart below). It was unlikely we’d get a move above that level on the first try. The key now is whether stocks can sustain their momentum and break it to continue higher later this week.  Under normal circumstances, I would be inclined to think this would be the case. However, yesterday’s price action did NOTHING to help bond yields, which have been the biggest issue as far as the financial system is concerned. Yields rose for both the 10-year and the 30-year Treasury bonds yesterday. Both are now back at the levels at which they triggered the stock market meltdown last week.  So, was last week's meltdown a fluke? Do stocks no longer care about bond yields? Or was yesterday’s rally just “start of the month” buying by large institutions after which we’ll see stocks take it on the chin again until yields fall and stay down? |
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