EQUITIES FINALLY PAY ATTENTION TO TREASURY YIELDS
Treasury yields have lately been moving up, but stock market stayed oblivious until today right after five year auction. Reaction of equities to change in yields is one of the factors in our timing model. What we observed today is a significant shift in the reaction. However, there is still no change in our market timing signals.
Our intermediate term model stays net 30% short.
Our short term model stays net 10% short.
May 27, 2009