Wednesday, October 10, 2007

Oct 10 InterMarket Reversals

With the yield on the 10yr hitting resistance the last few days around 4.65%, you had to expect a reversal (considering, when was the last time you saw the FED raise interest rates after a 50bp cut,,,also there are talks of possible cuts in other countries to follow in the USs' footsteps). With another FED meeting at the end of the month, you could see the yields continue down and the stock indices to begin to weaken in anticipation of no rate cut. Seeing the 10yr go back to 4.5 in the coming weeks is very likely. The stock indices traded inversely today and sold off, with YM taking the biggest hit of the indices. This leaves my outlook for the future to remain bullish on small/mid caps (IWM) and neutral on big caps (DIA) for a potential 4th quarter GROWTH STOCK oriented rally.

No trading for me today.


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