Since 2007, when support was taken out on the 10-year yield, the S&P 500 fell at least 15% in the next 90 days. With yield support breaking again, will stocks play a game of “Ketch-Up” to yields?
CLICK ON CHART TO ENLARGE
Yields on the 10-year note have been a pretty decent indicator to which direction stocks were heading in the near future, as each break of support at (2) was followed by at least a 15% decline in 90 days. Now yields have broken support of a bearish rising wedge at (3). So far stocks have not followed the breakdown in yields!
Is it “different this time” or are stocks about to play a quick game of “ketch-up” to falling yields?