For the Bulls, The Suspense Is Hard to Bear

The Bond Vigilantes kept the suspense going today. They closed the 10-year Treasury bond yield at 4.22% (chart). It's widely feared that if it rises above 4.25% (i.e., last year's high), the next stop could be 4.50% and even 5.00% if the yield curve disinverts with the long end rising up to meet the short end.

The stock market has been on edge ever since the yield crossed back above 4.00% at the start of the month. The S&P 500 is down 3.3% from its July 31 high for the year (chart). It fell below its 50-dma today. A bounce off the 200-dma still looks possible without violating the market's bullish channel since the bull market started on October 12.