Higher Long Term Yields?

In our "roadmap for the next couple of weeks", I stated that the market dynamics appear to be changing.  I sense that yesterday's price action is beginning to confirm for investors what I have been seeing on the charts for about a week now.

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SPY v. UDN

Figure 1 is a daily chart of the S&P Depository Receipts ETF (symbol: SPY) in the upper panel versus the PowerShares DB US Dollar Bear ETF (symbol: UDN) in the lower panel. 

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An Obvious and Important Divergence

As you know, equities have been on a tear in September, and in this market environment, we also know most assets are highly correlated and tend to move together.  At times, it seems like there are only two trades.  There is the "risk on" trade as represented by equities and commodities, and there is the "risk off" trade when bonds outperform.  This is nothing new and something that has been present for a long while.

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FOMC Statement: Side by Side

Some more great work by good friend TL on the changes to today's FOMC statement.

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Taking A Stance

This is the bullish argument as put together by good friend TL. It is an excellent review of the bullish and bearish arguments facing investors today. Our analyst comes down on the side of the bulls as he finds monetary policy, valuations, and sentiment favorable. Thanks TL!

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