The signs are everywhere if you just know where to look, and the bond market is sending us a big tell.
If you follow my work at all, then you know I always say “watch the bond market” for tells as to where stocks may be going. People invariably look to the stock market itself for signs as to where it may be going, and this also invariably leads to often very wrong signals.
As a trader you need to watch the movement of cash throughout these markets, and it looks to me that an exodus of cash from the bond market is about to occur and where will it go? Into stocks.
Despite this stock market being ridiculously overvalued by historical norms, in the short run this market is going higher based upon central bank management/support.
Have a look at the chart below, ticker (NYSEARCA:BND).
It looks to me that this trade (above) is getting old, and if this plays out as I believe we are going to see cash move into stocks and soon.
We will also likely see cash move out of other “safe” assets and into risk as well, (see my last two articles).
As individuals who are seeking to capitalize on all this well, I hope that I am making this simple.