Quick Look: Bond Yields Continue To Rise

The market is struggling near the flat line so far this morning, after somewhat disappointing action yesterday. Remember that the market opened strong yesterday on the news of the Bush tax cut extensions, but it would up giving back those gains by the end of the day.

Investor sentiment has become a bit complacent in recent weeks, so it may be that a little shakeout is in order between now and year end.

Asian markets were mostly lower overnight, and Europe lower this morning. The dollar is up for a third straight session, which is weighing on commodities. Gold prices are down more than 2% to $1376, and oil is also down near $87.75.

The big move is in the 10-yr yield, which has been spiking higher the last 2 days. Yields are up another 11 basis points today up to 3.28%. As for the VIX, it has not risen yet, and is still at low levels near 17.77.

Trading comment: The market action yesterday sometime speaks of a market that is a little tired. It would not surprise me to see the market rest here a bit. Then again, given that we are close to year end and performance anxiety is a factor, one cannot rule out the same action playing out where we see a 1-2 day pullback and then continued stairstep higher action.