Bonds Get Crushed

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 |  Includes: DIA, EEM, FXI, GLD, IEF, IWM, QQQ, SHY, SPY, TLT, UUP
by: Wall Street Sector Selector
by John Nyaradi
Bonds were crushed yesterday while equity markets moved higher in response to better than expected news on the employment front with the ADP December index showing a gain of 279,000 versus 92,000 previously and the December ISM at 57.1 versus 55 prior.
The FOMC meeting showed the Fed sticking to their QE2 plans while world food prices spiked to a record high and now stand at levels that triggered riots in the emerging world in 2008.
Interest rates continued their recent rise and the dollar strengthened, causing an ongoing selloff in precious metals and commodities.
The new Congress began their work and the discussion is already turning to the Federal debt ceiling and how/when/how much to raise/not raise it.

Daily Moves for Major ETFs:

  • Dow Jones Industrials: (NYSEArca: DIA) +0.34%
  • Russell 2000: (NYSEArca: IWM) +1.17%
  • NASDAQ 100: (NasdaqGM: QQQQ) +0.86%
  • S&P 500 Index: (NYSEArca: SPY) +0.50%
  • MSCI Emerging Markets:(NYSEArca: EEM) -0.25%
  • MSCI China (NYSEArca: FXI) +0.08%
  • Gold (NYSEArca: GLD) -0.28%
  • 7-10 Year Treasuries: (NYSEArca: IEF) -1.08%
  • 20+ Year Treasuries: (NYSEArca: TLT) -2.20%
  • VIX -2.07%
  • U.S. Dollar (NYSE:Arca: UUP) +1.01%

The major indexes remain overvalued and overbought on a technical and fundamental basis and so Wall Street Sector Selector remains in “Yellow Flag” status, expecting choppy to lower prices ahead.

Disclosure: Wall Street Sector Selector trades a variety of widely traded exchange traded funds and positions can change at any time.