After a very strong rally early in November, the home builders have done nothing over the past two week…even though rates have continued to fall in a meaningful way.  Is this just a normal “breather”…or is it telling us something about the group…and thus the economy?

After a month of an incredibly strong directional correlation between the Treasury market and the stock market, that correlation is starting to break down this week....which seem to indicate that the stock market’s rally is getting a bit tired on a short-term basis.

After breaking below the “neckline” of a “head & shoulders” pattern and a multi-month trend-line, long term bond yields are now testing another important support level.  If (repeat, IF) it can break meaningful below that level, it’s going to be even more bullish for bonds.

The November been exactly like last year’s Nov rally, so it’s not out of the question that we could have a big reversal soon…just like we got in December last year.  If (repeat, IF) that happens, it will catch a lot of people offsides.