Stocks Setting up for Big Slide
By Tim McMahon, editor
Historically whenever the 10-year Treasury yield drops 1.2% over a short period of time a bear market for stocks resulted within two months . This signal presaged steep market crashes in 1990, 2000, and 2007.
The Treasury yield signal is now flashing a major warning. On April 5th, 2010 the 10-year Treasury bond was yielding 4.01% and is currently yielding only 2.79%. So over four months the T-bond yield has fallen 1.22%. By this signal we can expect a 20% drop in the stock market over the next two months and it is possible that the beginning of that drop has begun today with a 2.5% drop. Continue reading
