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Old 06-07-2007, 10:31 PM
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Difference between now and February 27

The big fall on 27 February and in the week or two after was just a technical 38.2 Fib correction of the previous uptrend. The 10% fall in China was the trigger but that's not really a fundamental reason for stocks in the world's major stock markets to fall. This week's sell off, on the other hand, isn't panic selling or purely technical. The bond market is capitulating with yields on the 10 year note going above 5% and breaking a long-term trend line. This is bad for stocks. I'm not saying the rally is at an end but there is good fundamental reason for the fall this time so it may be longer lived than the February/March correction. It's a great time to be short ZN.

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