You See Bottoms; I See Complacency

Stocks are slowly dripping lower with modest intraday bounce attempts, for now at least.

However, the noteworthy action this morning is that both rates and the Dollar are spiking. 

I have not been shy at all in voicing my view that, ultimately, a new bond secular bear market is underway and that will be the undoing of the great equity chase higher, rich valuations be darned. Fund managers have dumbed themselves down to the point where they will gladly chase up multi-trillion market cap firms trading at 30 times forward earnings in a higher rate world just to try to avoid failing against the benchmark. History says that type of stupidity unwinds harshly. 

And when it comes to Treasuries we are at the point now where even seasoned market veterans are boldly buying TLT calls, like they did Friday, assuming the prior forty-plus year disinflationary regime is still afloat.

But it is not. 

We are in a new world now, and equities are very slowly getting the message, with much more room to fall once they message is fully embraced. Higher rates and a higher Dollar should break the back of this market.

And, no, 4200 on the S&P is not a bottom target--It is much closer to a top than a bottom, if anything. 

Also note how quickly China gave up Friday's news-driven rally. FXI and KWEB, e.g.. The China levered bear ETF is YANG, and it is worth a look as I also do not see bottoms there.