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What the Bond Market is Telling Me

Hey, Ross here:

Although yesterday morning’s CPI data was mixed, investors took it very positively.

It was a good day for the bulls – but I want to see more confirmation first.

In the meantime, let’s look at a chart on a massive market stock traders often ignore – the bond market.

Chart of the Day

Source: @Bespokeinvest via X

The general rule is – the higher the 10-year Treasury yield, the lower the stock market.

This hasn’t always held true during this bull market…

But it’s been generally true over the past month or so, with yields steadily rising as stocks struggled.

Yesterday’s drop in the 10-year Treasury yield was the largest drop since December 2023.

This is a good sign for the markets, though like I said, I want to see more confirmation first.

Here’s another interesting chart – the level of people shorting the Treasury bond market (aka expecting yields to rise further) is the highest in years.

Source: @SubuTrade via X

If yields continue to drop, these shorts could get squeezed out…

Which would in turn cause yields to drop even more.

And that again, would be good for stocks.

Insight of the Day

The combination of renewed bullish momentum plus earnings season is a rare opportunity.

The signs of renewed bullish momentum are promising…

Especially because we’ve just entered one of the most lucrative periods of the year – earnings season.

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But with the market on the verge of recapturing its bullish momentum during the start of earnings season…

Now is the perfect time to put this method to work.

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Ross Givens
Editor, Stock Surge Daily

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