After pulling back from 1.56% and consolidating for two days this week, US 10Y yield started to moving again!
From the daily chart, it's inevitable as the recent demand zone holds very well!
What I'm expecting is the below two scenarios: 1. yield keeps going up and investors are scared to flee the stock market. Bull market ends! 2. yield keeps going up and investors are concerned first, but eventually shrug off the yield hike. Bull market continues!
Personally, I prefer to the second one. By looking back and studying the history, bull market ended with fed rate hiking. US 10Y yield weigh on the market, but the decision maker is the target rate.
So, my overall asset allocation strategy is buying the dip. There is warning for sure, but it's not over yet!
Комментарий
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From the chart, it's clear that another higher high will be created.
Thanks for sharing this chart and quick research note. It's especially helpful as rising yields make front page news. It's been featured in Editors' Picks!
@RICHMONSTOCK, This time is different :P Seriously, always good to get a warning.
JICPT
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@RICHMONSTOCK, I like your comment. from the academic perspective, I have to define 'over' (magnitude). Does 30% drop mean over? and how long does it take to recover also matters. For example, 40% drop in 3 months, and 1 month full recover afterwards. Thank you for your comment. It encouraged me to push the boundaries.
wimmar0
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Two scenarios that cover every possibility :P
Woerle
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@wimmar0, not sure. There are always more than two possibilities!........another one f.e. may be that the FED is buying longer term bonds and bringing down the rates at the long end to narrow the spread between short term and long term rates.