There Is A Fork In the Road-Do you Take It?

The past two days have shown some very dramatic trends in the market. But we will not discuss the parabolics of AAPL $589 stock up 8% in five days which you all know  (Will newbies get into AAPL now?). Here are some key benchmarks we can track at this major juncture:

  •  Ten Year Treasury interest rates have climbed to 2.269 % from a recent low of 1.8% presumably because of a stronger dollar, better jobs report, no mention of QE from the FED,  an improving economy with retail sales up 1.1%  and a more optimistic real estate outlook. A flow of money into equities from bond funds could cause bond funds to  take a big hit. Equities continue to rally and the 10 year yield is rising . Track:  HYG (91.13) high yield bond ETF yields 7.26%, LQD ($114.65) corporate bond ETF yields 4.24%, and TBT ($20.94) ultrashort 20+ yr treasury . The recent October high for the TBT is $22 in October. New trend is potential bond sell-off but will Fed Operation Twist through June temper this move.Some economists however believe the de-leveraging will keep rates low for a some time to come.
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