QQQ: Another One Bites The Dust

Last week discussed the imminent decline of SPY, which is still imminent, but a formal Sell Signal on the SPY Trading Model has not yet triggered. The same can't be said for QQQ as it's Intermediate Term Trading Model did flip to the short-side at the end of last week:

QQQ Intermediate Term Trading Model 

The potential exists for a steep free fall in QQQ over the next two months. No doubt such a drop will drag along other indices as well, including SPY. If your keeping score, QQQ joins IWM in formal "Sell" mode, while DJI and SPY remain, "on the cusp." Once all four are in agreement, Free Fall mode should kick in. Until then, summer doldrums may continue. 

US 10 Year Yield - Long Term Trend

What could cause a free fall into October seasonal crash mode? Note above the 10 year yield on US Treasuries. Just over one month into a fresh Buy Signal it is close to a 10 month break-out above 4.22%. That is a hefty risk-free return alternative to stocks as is, but it looks primed for a breakout to 5% and points north, i.e., a cataclysm for financial markets.