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S&P500 recovers as bond yields rise, but TSX weakens

By Colin Twiggs
June 11th, 2013 3:30 am EDT (5:30 pm AET)

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10-Year Treasury yields respected support at 2.00%, confirming the primary up-trend. Only breakout above 4.00% would end the 31-year secular bear-trend, but a rise to there would result in an almost 50% loss for bondholders. Rising yields reflect market expectations that the economy will recover and the Fed will curtail further quantitative easing.

10-Year Treasury yields

The S&P 500 respected support at 1600 and is headed for a test of the upper channel around 1700. Reversal below support at 1600 is now unlikely, but would warn of a correction.

S&P 500

The VIX is rising, but remains in the green zone, below 20.

VIX

The TSX Composite reversed below support at 12500, indicating weakness. Follow-through below last week's low would suggest a test of primary support at 11900/12000. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure.

TSX Composite


Profits can be made safely only when the opportunity is available and not just because they happen to be desired or needed......Willingness and ability to hold funds uninvested while awaiting real opportunities is a key to success in the battle for investment survival.

~ Gerald Loeb

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