BOND RATES SOAR TO 5.25% OVERNIGHT!

STOCK FUTURES PLUNGE...MLPS FOLLOW!

We have seen an amazing adjustment in interest rates as we have risen 30 basis points since Wednesday peaking this morning (so far) around 5.25%.

Its not often you see gaps and huge spikes in the bond chart like this but we have yesterday's spike and what is not shown which is the overnight spike in rates. Now 5.25 is last years high and i think market traders have priced that spike in. So if it holds and rates begin to back off from that we could see stock (and mlp) prices try and find a bottom in here. However if 5.25 does not hold we we see this spike up get out of hand i think it might get pretty ugly out there today.

Meanwhile the MLP index is now close to its low from 2 weeks ago. You have to think that this huge rate adjustment in the 10 year will continue to exert pressure on prices since the yield spread is about as low as its ever been. Its going to be an interesting day ahead to be sure. Traders should watch for any gap down opens as possible entry points should you be in the mood to catch any falling knives!

Drops like this make upgrades and downgrades useless sometimes. Nothing on the list but its early. No corporate headlines either to drive prices of individual issues.

When i started this post futures were down 9 and the 10 year was at 5.24%. Now futures are down 5.50 and the 10 year is holding 5.24%. Look for a rough start and then??????