BOND/MARKET CORRELATION REBUTTAL

Privately, not everyone agrees with my comments on rates and market behaviour.

In explaining my previous chart:

"The correlation has been intact since 2000.....10 years...I'm not fighting that. .....and that we may already be back into bear...recession never ended cept gov stim stats....a MUCH bigger decline is out there lurking.....only a break of 3.8 ish% on a sharp reversal changes my mind."

The disagreement came in the form of this basic comment....."we've been in a bear market rally since 1980?"

This I assume is coming from fact bonds have rallied on a monthly long term chart for almost 30 years! so yes looking at that maybe my chart made no sense.....on the contrary however.....that IMHO is NOT the case, my rebuttal below:


"You miscontrue or dont understand the correlation. In a BULL MKT price, can to a point, ignore the change in interest rates....the DROP in rates in 1998 foreshadowed the 98 crash. Rates bottomed with stocks in 1998...in a BULL Mkt rates rise as a SIGN of economic strength seen as BULLISH.

We as you know are not currently in a secular bull mkt, we are in secular (long term) BEAR MKT yes? if you deny the direct relationship apparent for the last 10 years.....I cannot further discussion.

For last 10 years falling rates were sign of WEAKNESS, are almost always sign of weakness......stock prices fall.... I specifically stated over last 10 years why go back to 1980 to make your point?

..... when one considers only one way to view and decide may be when one can more easily be set up for failure.... IT is how I see things and communicate with others is thru observation.....until out of this BEAR mkt....rates will gather no steam but moss.

ONE CAVEAT perhaps....is the bond bull running since 1980's.....yes that is LONGER TERM TREND SECULAR....I only began from 2000 bear because that is where the direct correlation worked best......a BUST of a potential BOND BUBBLE....that would send rates skyrocketing ending the 30 yr bond bull with a backdrop of economic stagnation.....that would rewrite this playbook. "

Please dear readers do NOT agree with everything I write, the idea is to open your mind and maybe we agree, and if we don't respectfully that's OK too.

Duratek