As much as we agree with the wisdom of higher rates ad infinitum from the elders of the punctilious bond tribe, we still respect the considerable expression of time in the bond market which points to a destiny of ~ 1% for 10 year yields and a troughing rate environment for the foreseeable future.
Quite similar to what the 2004 comparative pointed towards, gold broke higher over the past few sessions. It wouldn't surprise us to see gold consolidate across the short term before continuing on its way higher through August.
As we pointed out in previous notes, although the SPX has run across the consolidation trend encountered in 2004, the market has followed the momentum pattern which saw four sequentially stronger corrections before breaking higher in the fourth quarter.
Should momentum unfurl in the equity markets similar to 2004, the SPX will begin its final correction soon - likely in the back half of this week.
The Shanaghai Composite took its time in carving out a tradable low, but appears to be taking the spotlight and performance torch from the U.S.