So here is the bond picture (note some mistakes in the Yahoo Finance prior 10-year bond yield data). Yesterday, the 2-year handle jumped up to 4.97 from 4.933 at the auction.

Now here's what happened this week in the Asia-Pacific markets I watch, particularly the hugely important Japanese Nikkei Dow (225) and the speculator-ridden Bombay Sensex 30.

Bombay Sensex 30 index

Japanese Nikkei 225 index

From last Saturday's Cara WIR:

The big news was the reluctance by a smiling ‘Snow'man to put a 5 handle on those 2-years until after he signs at least a 2-year employment contract on Wall Street, with a standing invitation by CNBC to fill in for Kernan. LOL

The 30-year T-Bond yield went from 5.13 up to 5.15 pct this week, and the 10-year bond went from a 5.05 pct yield down to 5.04. So, the price of the longer maturity TLT dropped a smidgeon (-0.21 pct) while the shorter one AGG rose a similar amount by +0.18 pct.

This is no big deal to 99.9 pct of you. The Death Watch of the 5.00 pct 2-year, however, is still on. Don't take your finger far away from the equity sell button.

There is a lot of important econ data out next Thursday and Friday regarding productivity and jobs, energy inventories, construction spending, factory orders, existing home sales, and on and on.

And the spin machine is taking a three or four day long weekend " only to return to the office by noon Wed ahead of the 2:00pm release of the FOMC fiction, I mean, Minutes.

I don't know if the spin people are going to have their stuff ("noise") ready by then.

Clearly they didn't. Yesterday's market weakness was quite severe. Today we see that the Asia-Pacific markets have also been smashed. The equity market is at a significant turning point this week.

How we get through the next couple days is crucial. The market psychology has clearly changed as a couple weeks ago I warned it would. If you are already well positioned, then you are not worried. But if you have always bought into the notion of ‘buy, hold and prosper' then you are facing some challenges.

Moreover, if you are an unqualified hedge fund trader, your 2Q06 results will make that apparent.