Short Term Trading Member Forum

[techcharter]

Q: Why do stocks and bonds rally together?

A: It's part of a major shift in investor sentiment. The population is polarizing much the way the '04 featured Red and Blue states.

There is a good chance the 30 yr bond will make another rally to 10 year price highs. Suppose a multiyear Wave 5 started in 1995. It would be tracing out an ending diagonal.

1995-late 1998 wave a
late 1998-2000 wave b
2000-spring 2003 wave c
spring 2003 to spring 2004 wave d
spring 2004 to present wave e

With the potential of a DOW and Bond top, the reverse should be even more devastating as it shows nobody has any fear investing in stocks or lending money. Borrowers are overconfident they will be able to repay loads.

http://www.financialsense.com/Market/intermarket3.htm