Tuesday, June 12, 2007


Rising bond yields are stalling this rally. We need to see a strong surge in bond buyers and falling yields to get this rally back on track. So far equity money flows are still positive and there is nothing to suggest that the big institutions are liquidating positions. Caution at this stage is more vital than ever. Unlike 1999-2000, the smart money has no one to distribute stocks to. Retail buyers are not participating in this rally perhaps remembering all too well how they got burned last time around.

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