10-yr UST up 3.4550% crushes S&P500 rallies - 'Iceberg' coming (update 2)

As pointed out in The markets are entering a 'Fog of War' - Yields going upwards after the Feds QE2, when most of the market claimed that the the Fed's QE2 was going to flatten yields, especially the short end and propel stocks into hyperspace. This much is true, with some positional adjustments and bulltraps, stocks have resumed upward. With the Dow now breaking the 10400 resistance but as a yield blowout continues and US Treasures were sold, it sent the S&P lower now at 1241. The Feds QE2 experiment has been a flop, as mortgages pegged to the 30yr UST are moving upward and the very important 10yr UST now heading towards 4.00%.

But stocks are rallying (albeit thin liquidity: note S&P500 sell off) with money going mostly into risk buys on short term/rapid trading (HFT's). This extreme bullishness (with dashes of volatility) that has crept into the markets of late will end in tears, as the global economy moves closer to an iceberg.

10yr UST:



S&P500