Treasuries Close Below 2.9% As Stocks Reflect The Reality Of The Twilight Zone
Stocks continue to represent all the reality contained within the confines of the Byron Wien twilight zone. The decoupling between stocks and everything else is getting even more laughable than before (and it was damn funny then). A simple weekly chart shows that the divergence between stocks and bonds is worth about 35 ES points alone. Extend this three months back, and stocks are about 100 points rich. Throw in the carry trade (cause with no money from mutual funds, stock buyers would at least need the benefits of currency funding arbitrage, as otherwise the whole all too relevant question of just where the money comes from to buy up all these stocks may be asked by someone) and the EOD ramp, in turn, becomes painfully obvious. All in all, if one is trading stocks at this point, one deserves to lose it all. We reiterate our advice from last summer when the market went batshit for the first time: take your money, and go to Vegas. You have much better odds, you won't be frontrun by an Atari 2600 while playing craps, and if you lose it all at least your stay will be comped.
Intraday ES-UST divergence:
A longer-term chart of the divergence:
And the carry divergence: