Thursday, May 28, 2009

View of a Morning Reversal





With Treasury rates backing up once again, we've seen a major reversal in stocks, with Consumer Discretionary shares (XLY; bottom chart) leading the downside. As noted yesterday, this is a paradigm shift; where rising rates had been a healthy sign of risk appetite earlier (exiting Treasuries, buying riskier assets), now those soaring rates are viewed as a threat to the consumer and the prospects for economic recovery, not least because of their threat to housing (XHB; top chart).

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1 comment:

sandp said...

Thank you - I learn every day from your blog - your perspective on different sectors - how they relate and analysis.

I have come to depend upon your daily pivots/r1/s1....

Thanks again.