SPDR S&P 500 (SPY)

[gumbie05]

After the "Distribution" comes "Liquidation".....The whole economy is so weak and the markets are so addicted to QEs that a "slight" jump (sic) in rates spooks them to no end! In this case rates (on the 10 Yr) merely a "spike" from 1.7 to 2.2 in rates over the last month and all hell breaks lose! That's what happens in an over indebted economy. It's like an addict....the only thing that makes things "appear" better (so called recovery) is more drugs (i.e. QE). Once you get off it- it only takes a couple of months for the markets to have spasms! The only reason we've taken this long (from the last spasms) has been the announcement of more QE from BOJ (Oct) and ECB (Feb) that gave this market further legs the Q1 of 2015! The dollar (DXY) is signaling that the FED will go forward with lifting rates in June (although 25 basis points at a time isn't really that much especially when coming off ZERO Rates for 7 Years and it won't mean much but to an addict... it's like going cold turkey and being splashed with cold water at the same time)! The Markets will soon start to realize that the Fed lifting vs the ECB and BOJ doing QEs = a wash! No effect! I.e. The US Markets will need the drug again (ie more QEs) and start having convulsions- probably around September '15! JMHO