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Gary Kaminsky does a reasonably good job on CNBC … it helps that he was a money manager in a previous life (as I was). I mention him as he quite frequently mentions how the bond market is signalling one thing (economic weakness) and the stock market signalling the opposite.
Let's take a closer look at the relationship between the 10 Yr Treasury yields and the S&P 500:
Daily Chart:
Hedging when volatility is low
Something I've mentioned in previous posts (such as this one, "Plan not to Panic") is that investors ought to consider hedging when volatility is low, and hedging costs are relatively low as well. That's not the case now, as you can see from the second table below. Nevertheless, if Portfolio Armor downloads and subscriptions are any guide, every day the market tanks, more investors start thinking about hedging. It seems that some long investors start shopping for umbrellas after they get soaked.
