Long bond signals..

Below are some charts that reflect the technical picture in the long end of the bond market. The first chart reflects how well the stock market has correlated with the bond market lately. Given that, the next two charts suggest that Bonds might be gearing up for a pretty strong rally which would mean a nice deep stock market correction. The technical picture in stocks also confirms this in my opinion. I suspect the deflation trade is back on with money coming out of the short end of the curve, as well as Gold, Oil, basic materials and stocks and onto the sidelines, waiting to buy the long end on any weakness ahead of the auction next week.