10-yr UST 3.1650% crushes Dow and S&P500 rallies (update 1).

Just when we thought that the excess liquidity pouring into Wall Street via the Federal Reserve could maintain a forever rally in stocks, but it has to be realized that if US Treasuries are getting abandoned (to go into risk trades, like stocks) this in turn forces UST yields upward, which in turn makes the US dollar bid, this sends stocks lower; all on the expectations that interest rates will start to go up, as mortgage/credit interest rates will start to climb.

As discussed in An interest rate wipe-out coming (update 1) the volatility in the stock market is a sharp volatility (daily) which will continue with an interrelationship with UST yields and USD dollar going upward, as the yield on short/mid/long term UST's effects USD trades (buy). So any expectations, say buying into an open (stocks) for a continued rally maybe disappointed as a sell is most likely towards the end of close, this has 'unlimited' time frame as the market is now trading in a high frequency trading environment/s that is all about scalping on tight bid/offer spreads. But one should be aware that the 'unlimited' time frame (buy (stocks) open sell close counter relationship to yields bid, USD bid), is only unlimited once the structural collapse of financial markets begins, which is probably occurring now. As the global economy is completely dysfunctional i.e inflation problems in China, sovereign debt problems in Europe as the US prints money and remains an economic basket-case.

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