Saturday, 21 January 2012

Interest rates, bonds and SP500


Currently the U.S., Britain and Europe are asking about one per cent for loans. The sovereign debts increase enormously year by year. There is no stop in sight for either of these habits. The SP500 has moved from 100, 1982 to 1.500, 2000. A drop to 800, 2002 and a new top at 1.500 2007 and a drop to 800, 2009. From here a top 2011 or 2012 at 1.300 – 1.500. The big technical picture shows that there are five waves on upside 1900 – 2001. This third top in 2013 seems to be the final top before the big drop that will take the indexes down to between 800 till 1.300  within a few years. Yields on 10 year notes have fallen from 16 % to 2% during 30 years. These yields are at the very bottom and from here we will start to move up again within months with the long term target of 16%. Bond yields and SP500 followed each other 1962 – 1985. Then yields fell and SP500 rose to 1.500. After the top that will come 2014 the index will fall and rates go up until the curves meet again.

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