klevera's  Instablog

 

The U.S. T-yield is forming a potential double top. If it breaks 3.330 level, we could see some sell-off in equity market. I do not think yield will be lower substantially from here given the fact that strong upward swing in the commodity market. The substantial move from last October looks quite tired. This short squeeze and chase for performance rally has been accompanied by stiff move in bond yield. When we look at the following chart, we can observe other international markets have made substantial gains since last October. However, Shanghai index is topping out now. Shanghai index tends to show its hands earlier than other markets as we can see in the last April. Shanghai sold off in the mid of April. Two weeks later other international markets followed the suit. Shanghai index has lost approximately 10-12% from the November high.


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.