Stocks are going up. Interest Rates are not.

This we know.

If you haven't seen our thoughts on stocks lately, I encourage you to catch up here: November - October - September. Today, however, we're more focused on the bond market and what we can learn from it.

First of all, here is the US 10-year Yield. If we're below 2.07 then there is no reason to expect a severe bond sell-off. I guess it depends on what you consider severe, but bigger picture I don't think there is any change in trend until we're above that. And it's not happening tomorrow. 

From the desk of Tom Bruni @BruniCharting

In late August we took a simplified look at the Bond market and discussed the potential for mean reversion lower (Rates higher), but that the market remained choppy and we should adhere to strict risk management to avoid getting run over on the short side.

Choppiness continued, but Bonds have sold off a bit.

So what now? Let's take a comprehensive look at Bonds and how we're approaching them into year-end.

From the desk of Tom Bruni @BruniCharting

On October 26th I had the privilege of speaking at the Trade Ideas 2019 Summit in San Diego. It was a great opportunity to share our views, but more importantly, meet a ton of new people from all walks of life and hear their different perspectives. I had an absolute blast.

Last year JC presented at the same conference, outlining our very bearish thesis for Equities. This year my tone was the exact opposite!

I only had thirty minutes, but I ran through nearly 100 slides of Equities, Commodities, and Interest Rates, outlining our bull case for Equities.

The full video is available below and you can email info@allstarcharts.com if you'd like the full slide deck. Hope you enjoy!

In this Episode of Allstarcharts Weekly, Steve and I talk about the underperformance of the S&P500 relative to both Gold and US Treasury Bonds. The big question I think worth asking is whether these are massive distribution patterns in US Stocks on a relative basis, or if these are just consolidations within an ongoing uptrend that has been in place for years already? If you're in the bear camp / recession coming crowd, then you would expect these tops to complete themselves to the downside. If you think stocks go on to make new all-time highs (I do), then these are not massive distribution patterns but just healthy consolidation instead.

Think about how well everything is going this year! The S&P500 is up almost 20%. Bonds are up 22% and even Gold is up 17%! Heck Bitcoin has more than doubled! Can things get any better than this???

Stocks are still trying to break out of this massive range since early 2018. After some selling early this week, the range is still intact. I think this chart of the Global 100 Index tells the story best:

In this Episode of Allstarcharts Weekly, Steve and I make the bear case for US Stocks. I think we've been pretty clear about the fact that we believe stocks resolve this consolidation since 2018 higher, not lower. But I always think it's important to take the other side and consider the alternative. What will the market environment most likely look like if we're wrong, and we should be selling stocks rather than buying them. I think we brought up some good points here.

Raoul Pal is someone whose work I've admired for years, both for his global macro perspective on the markets and the amazing job he and his team have done with Real Vision. I like how they've removed a lot of the conflicts of interest that come with traditional media reporting and the sensationalizing that comes along as a result.