The bond market is going to be an important driver in equity prices for the rest of the year, and I would gently assert that they are looking bullishly-poised (which, if true, would mean declining interest rates). Here we see TLT finally pushing above its downtrend, having successfully conquered it.
Viewing the trio of exponential moving averages (50/100/200), we see that these have not been bullishly-configured for over two years. We could, however, be getting closer to a crossover.
This would all line up nicely with the notion that small caps ($RUT) would seriously underperform the big caps ($SPX) for years to come, since a weak interest rate environment would tend to be bad for the Russell 2000.
