CHANGE OF COMPLEXION? We are always looking for a change in complexion. One may be at hand. The inflation number came out. HOTTER THAN EXPECTED. But it is not the news, it is how things react to the news.

The 10 year yield, which has been moving higher and above the 50 day moving average, is currently above next resistance of 4.2%…up over a stick this morning to 4.290% as we write this. Gather the belief no chance of rate cut while at the same time, the free market/real rates move higher. Remember, what matters most to us is the free market of yields and right now, it has been headed higher.

The nascent move in small caps could have already hit a wall. Financials were looking like another leg up…but doubt it now. Do not forget, sentiment is at an extreme complacent also. One heck of a combination.


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