Here’s Another Giant Caution Sign for Stocks

The last time the financial markets faced similar conditions, the S&P 500 fell 6% over the next three weeks. [Jeff Clark's Market Minute]( Here’s Another Giant Caution Sign for Stocks By Jeff Clark, editor, Market Minute A funny thing happened after the Federal Reserve decided to lower short-term interest rates last month… Long-term rates have shot higher. Look at this chart of the CBOE 30-Year Treasury Yield Index (TYX)… [chart] [(Click here to expand image)]( Just prior to the Fed’s decision to lower interest rates by 50 basis points on September 18, the yield on the 30-year Treasury bond was 3.93%. Today, that yield is above 4.4%. That’s one heck of a rate increase in just one month. Though, as I explained in the [video update]( we published prior to the Fed’s decision, it was predictable. Recommended Link [Worker Strikes: Are You Prepared for What’s Coming?]( [image]( The rapid advancement of artificial intelligence and automation is reshaping industries and posing threats to jobs, pushing America’s financial system to its limits. The recent Longshoremen’s Strike is just one example; we’ve also seen Hollywood actors and voice performers strike over AI-related concerns, reflecting a much larger crisis on the horizon. [Click here to prepare.]( -- As a result of this rise in long-term interest rates, Treasury bond prices have dropped. For example, the iShares 20+ Year Treasury Bond ETF (TLT) has fallen nearly 10% over the past month. And that’s another giant caution sign for the stock market. You see, stocks and Treasury bonds typically move in the same direction. Over the past month, though, as the stock market has made new all-time highs – with the S&P 500 gaining nearly 5% – Treasury bonds have been falling hard. This sort of divergence is notable. One of these assets is due for an epic reversal. Either Treasury bonds need to rally to catch up with the action in stocks, or stocks are going to fall to match the action in bonds. I’ll bet on the latter. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. The last time the financial markets faced similar conditions was back in [early April](. The S&P 500 had been rallying and making new highs while Treasury bond prices were falling. The S&P 500 fell 6% over the next three weeks. A similar move this time around would have the S&P 500 trading back down toward 5500 or so by Election Day. Best regards and good trading, [Signature] Jeff Clark Editor, Market Minute [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Jeff Clark Trader welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](