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The yield on the 30-year bond and the price of the S&P 500 both peaked in September on the day of announcement of the QE3 program (see my injection gamble commentary). Earlier this week the government came to an agreement to avert the "Fiscal Cliff" and the yield on the 30-year and S&P 500 found themselves back near the QE3 highs again.
Are outside influences impacting the markets? Whether they are or not, how the markets handle line (3) below should tell us a good deal about where yields and 500 index will be a few months from now.
How the S&P 500 and yields handle this important resistance will tell investors a ton about portfolio construction in the early months of 2013.
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