With 10 yr yields around 4.40 and oil at 56, we are right at my magic index number of 10 i.e 4.4+5.6=10, that I have been talking about for some time on this blog. It has been working I must say like a charm. Above 10 there is downward pressure on the stock market and at 10 or below the market acts better and starts to recover. Since it doesn't look like we are going to get a biig rally in bonds in the near future, it seems to all come down to oil, I;m a long term bull on oil but in the short run anything is possible. In my last post 3/23 I said I didn't expcet the S&P to rally much past 1190. So far so good, but I think I'd revise it a liitle to 1196 which is a 50% retracement.
The dollar is strong, especially against the yen. Economic weakness in Japan and Europe, something I harped a lot about in my earlier postings, is responsilble along with the Fed tightenings of course. Look for this to change when the U.S. recovery starts to falter.
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