Thursday, March 25, 2010

Markets Responding to Economic Strength

Just a quick update to yesterday's post, observing important market dynamics, as the dollar (top chart) and 10-year Treasury rates (bottom chart) continue to march higher, as we continue to make fresh bull highs in stocks.

Strong dollar, strong stocks, rising rates: looks like markets are responding to economic strength.

I look forward to the indignant comments of permabears. :-)


optionyout said...

That's just the kind of remark that'll pop a bubble.

Edward said...

Brett, not to be indignant, but why did you refuse to note my earlier comment on the opening TICKQ heavy weakness (the worst since February)? Being a perma-bear and being observant are two different things. Glad my trading service caught that.

Jorge said...

Dr. Steenbarger,

I take issue with you, Sir. The last 500 ES points, since the preliminary lows at 666 in March 2009, are nothing but a sucker's rally, a dead cat's bounce and a bull trap, as we can clearly see by the low volume, the dire economic news and the tense political sentiment.

When the Government starts to euthanize the elderly to reduce Medicare and Social Security defic-itis, the Great Free State of Texas secedes from the Union and Canada and Mexico are forced to bail out the Un-united States of America, after joining them in the Amero, we'll see who has the last laugh!

;) Best trading,


Flowtastical said...

Amazing how XLF was up almost 2% with everything else lagging. Now its brought back to earth. Worth fading XLF as a intraday overbought?

Marc said...

"I look forward to the indignant comments of permabears. :-)"

Wow, I used to read your site regularly and I just thought I'd check back in. I see I haven't missed anything substantial.

richard said...

Just three months ago in the news, its was stocks going up on a weak dollar, pegging to the dollar was oil and so it went up. Now, its stocks going up on a strong dollar, oil going higher as strong dollar means stronger growth.

somebody make up their mind.

fabien said...

seems that your "I look forward to the indignant comments of permabears. :-)" have nailed the high of the day :-) !

Michele said...

Looks to me like today's turn-around was entirely attributable to ECB Head Banana J.C. Trichet finishing his quiche & Beaujolais and deciding, "Oh ho, eet iz now time to tank le marche du stocks Americain. Zat weel show zem!"

Davide said...

well, dollar up, rates up and stocks up.. that doesn't go together for long.. specially rates & stocks.

I like the permabear's chances better after today's spectacular reversal, but Idiot Waves proned by Golly Sax point to further upside potential, and any minor weakness a chance to pile up!

Dr, keep it up, good job!

bruce said...

Actually, what i find interesting is that materials and tips are going down.

When stocks and dollars and rates go up as tips and xlb, dbb, dba, dbc go down, it looks like deflation and high real rates may be on its way.

When i saw all of these things together last night, i was shocked.

david said...

The comment about perma-bears reminded me of this blog post. It wonders if the more sophisticated retail traders who read sites like zero-hedge (as opposed to the everyman buy-and-hold investor who reads Kiplingers) are the real suckers in this game.