Philly Fed

The bonds are noteworthy in that they are breaking the correlation with the S&P noticeably over the last many trading days. Once again today the bonds are not down nearly as much as they should be given the S&P rally. The S&P has made a higher high for 2013 and the bonds are not even close to a lower low. The disparity widens. On Wednesday, there was a minus 1000 tick which began the reality for the stock bulls. The FOMC minutes were very, very, very bearish. There can be no sugar coating or political spin put on the words and more importantly the pugilism between the liberals and the conservatives on the Federal Reserve. They have a face off and are now throwing punches. Thursday's Philly Fed news was certainly not good. The S&P did not have any bounce as we saw the 1500 penetrated. The spine of the bulls is now broken as the FOMC minutes was a dose of cold water on a burning bull. The last movement down needs to be an acceleration of volume and many instances of minus 1000 ticks to finally get this correction in high gear. The FOMC minutes this week was the catalyst that sent the S&P down 35 points. However the internals of the market, even with the Fed buying stocks, created a deteriorating environment.  We needed to see what the market would do if the Fed pulled their foot off the accelerator and I do think that is coming shortly

These bonds do not have staying power and are therefore suspect. So far the bonds do not seem to have much spring to their legs for the intermediate term. The tape action appears as if the Federal Reserve is not as active in buying as they have been. They have altered their style of buying or the buying has been offset by some huge selling. Nonetheless the bonds have some problems in front of them especially if they close below 142.