A bell-wether is a sheep that the flock follows. Some folks hypothesize that the long bond (U.S. Treasury 10 or 30 year) is a bell-wether for the other markets.
From TrueContrarian (link)
...long-dated U.S. Treasuries and funds such as TLT just touched their highest levels since May 15. Whenever Treasuries are setting new highs, it is just a matter of time before equities and commodities decline. U.S. Treasuries are an important vanguard of economic behavior...
(TLT chart)
Meanwhile, conventional wisdom is that a sharp decline on heavy volume followed by rally on low volume, often means the lows are going to be retested or broken. It seems I was wrong about my Friday blog entry--it wasn't too early to short. I thought the upcoming Labor Day holiday might bring an upward bias, and it still might, but it will be difficult to overcome the losses on Monday and Tuesday.
The recent market swings have been a bonanza for that tiny percentage of "hot" traders that have been in sync with the markets. Those traders, such as myself, that have been out of step, have gotten whipsawed or worse. A few that trade on full margin or use options for full leverage and also refuse to cut losses might be exiting the game for good.
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