December 3, 2013 Rising T Rate Slows Stock Advance

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The third loss in a row after small advances follows the rise of the interest rate of the Ten Year Treasury debt.  Today’s diagram plots the inverse or ‘value’ of the market rate for this benchmark security.  It is revealing how effective the rise in the interest rate –shown by its inverse, or dollar value, of the then year rate- has put the brakes the current bull market.  And not just now – we see this as the third recent replay of the higher interest rates-lower security values combinations that occurred this past August, September, and October.

Yet we see a positive outlook in today’s closing pattern of the DJIA and S&P500 three losses in a row, combined with two straight declines of the NASDAQ.  This is a bull market pattern since 17 of the last 21 occurrences came during bull markets.

However, the outlook for tomorrow is dim: in the past prices moved higher on nine days, they declined twelve times.

 

DJIA               -.59 percent

NASDAQ        -.20 percent

S&P500          -.32 percent

 

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