BTIG Krinsky Who Blinks First Bonds vs. Stocks in a Staring Contest

Who Blinks First? August 24, 2026

TECHNICAL STRATEGY Bonds vs. Stocks in a Staring Contest Jonathan Krinsky, CMT WHAT YOU SHOULD KNOW: ( The bond market has seen a slew of dovish data of late (NFP, CPI, PPI, Retail Sales) and a strong message from the Treasury about supporting the long-end. Yet 10 and 30yr yields ended near cycle highs on Friday. For now, stocks don’t seem to care much, but the question is who blinks first? Our view remains that stocks are vulnerable here, but if bonds blink first and rally, we would have to respect that in the short term. The factor rotation feels more like rolling squeezes to us, with the High Beta Momentum Short factor hitting a 52wk high on Friday, Bitcoin seeing its largest 3-day rally in three years, even as the NDX remains more than 4% below a 52wk high. While not the only prior, we did see a similar set-up back in June and September 2000, yet another data-point that rhymes with that era. ■ Who Blinks First? A slew of dovish data of late (NFP, CPI, PPI, Retail Sales) and the Treasury announcment for supporting the long-end. Yet yields ended near cycle highs on Friday. For now, stocks don’t seem to care much, but the question is who blinks first? Our view remains that stocks are vulnerable here, but if bonds blink first and rally, we would have to respect that in the short term. ■ Rotation, or Rolling Squeezes? Mag7 peaked 5/14, NDX 6/2, SOX 6/22, and High Beta Momentum Short so far 8/21. Some call this a bullish rotation, but our sense is it feels more forced than that. The SPX is up less than 2% since Mag7 peaked over three months ago. ■ High Beta Momentum - Study. High Beta Momentum Short at 52wk high, NDX -4% below 52wk high, and SPX within 4% of 52wk high. In other words, shorts are squeezing at the expense of longs (NDX), and the SPX is hanging in. That signal fired in June and September 2000, March 2004, November 2020, Feb. 2021, and again just recently in July and August. Something for everyone but yet another data-point that rhymes with 2000. ■ Short-term vs. Long-Term Breadth Divergence. Percentage of SPX > 50 DMA dropped from 72% in July to 55%. Not too dramatic, and the percentage > 200 DMA has been improving. Could suggest further near-term weakness while long-term trends remain firm. ■ Inflation Swaps Creeping Higher. One-year spreads up five straight days. Odds for a Sep. hike back to ~40%. Keep close watch through Jackson Hole and early Sep. data. ■ Respecting Gold's Message. Recently we said if XAU reclaims ~4500 we would respect it. Therefore, we would not fight the strength as long as it holds above 4500. If rising because of risk to U.S. debt, certainly would be a negative for equities should yields keep rising. ■ Biggest Bitcoin Rally Since '23. Bitcoin +20% over 3 days, largest such rally since early '23. Interestingly, in Jan. ’23 also +20% over 3 days and broke downtrend, then rolled back over and found support back at its 200 DMA. Could history repeat? ■ Restaurants Continue to Impress. Restaurants continuing their strong run of late. Charts with strong bearish-to-bullish reversals: Chipotle Mexican Grill (CMG, Buy, PT $45; Analyst: Peter Saleh), Bloomin' Brands (BLMN, Not Rated), Wendy's (WEN, Neutral, Analyst: Peter Saleh).

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The bond market has seen a slew of dovish data of late (NFP, CPI, PPI, Retail Sales) and a strong message from the Treasury about supporting the long-end. Yet 10 and 30yr yields ended near cycle highs on Friday. For now, stocks don’t seem to care much, but the question is who blinks first? Our view remains that stocks are vulnerable here, but if bonds blink first and rally, we would have to respect that in the short-term.

Source: BTIG Analysis and Bloomberg. BTIG, LLC Jonathan Krinsky, CMT (