With all of America's 401k's flowing into equities and with CNBC continually saying bonds are the worst trade around, one has to determine if continuing to buy here is the smartest way to go or take partials, roll up your stops and raise cash rather than buying this top.
Technically the monthly chart shows MACD posed to bear cross although the month is far from over. The bollinger band is flattening out which does not say to "buy" here but remain cautious and sit on hands.
Here TLT for a quick glance at the monthly and yeah, it's still selling. Could see a temporary bounce (here or there) but overall, the trend is still down so equities (or cash) it is.
I believe traders are taking profits at this fibonacci extension ahead of the June FOMC meeting and why not. The 10 year Treasury has been on a move and if the Fed doesn't raise (which most don't think it will) it can return to oversold and ramp up again before September.
QE is over. I repeat; QE is over. The market must find a way to stand on it's own ahead of Fed tightening. Are we growing enough to sustain a rate hike w/o QE assistance? This makes you wonder...........idc what Jim Cramer says. (he is noise - not news)
We have not seen any 'failures' or widespread fear to make one believe a top is truly in. Yes Greece is a concern but on a scale of size, this represents a tiny blip on the world map. The largest overall effect would (imo) be confidence in the Euro but one must wonder, is it baked in at this point? Some fear that if Greece fails, is Italy next with their debt? Is the Euro ultimately set to fail? I personally have no concern over Italy's ability to meet it's debts however just this morning ECB's Ben Moyer said it would not pose a problem if Greece leaves the Euro, so go ahead and go. Exports in Italy simply are nowhere what (little) they are in Greece. Greece itself simply should not have been allowed in the Euro to begin with. It doesn't belong. I make jokes that Putin and friends should just go ahead and buy Greece but a great part of me truly believes that would be for the best. Don't tell the U.N. Just let it happen and look the other way. All is well and move on with your business.
The market, in the meantime, is looking for reasons to head higher amongst the obvious profit taking which is taking place.
I think the market is at a profit taking level and seeking a growth story to head higher. Will we find one now or have to wait until September? Banks are one solid play but a pullback in the 10yr will cut that off at the neck. In the meantime, your 401k is busy pumping in and buying "here" but you have to ask yourself if it's the right thing to do.
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