Bear Market Resumes

Despite the market having had a nice rebound this summer, the bear market rally fizzled as it broke above its 50-day exponential moving average.

Long-term, we are still above the 200-day exponential moving average (EMA), but that too is within earshot. The SPY closed at 392.27 while the 200-day EMA is at 367.20. A drop below the 200-day EMA would be extremely negative from a technical analysis standpoint.

Furthermore, interest rates continue to climb.

As you can see, we have had quite a spike in the 30 yr bond rate. Higher rates mean higher expenses for businesses and individuals and this is not exactly a good thing. Higher bond rates also mean that our interest expense on our national debt is exploding. There is nothing on the horizon that suggests that we are not headed for the double-digit interest rates we saw in the late 70s and early 80s.