NEW YORK (ETF Expert) -- The S&P 500 is above 1500. CBOE S&P 500 VolatilityI:VIX is sitting near 15-year lows. And 88% of iShares S&P 100 (OEF) - Get Report component stocks are above respective 200-day moving averages.

Normally, you might hear more discussion about complacency and/or an imminent selloff. Instead, you're hearing more about the "Great Rotation" out of bonds and into stocks. In fact, if Laszlo Birinyi or Jeremy Siegel have your ear, we've just barely begun an exuberant stage for equities.

Bullish prognosticators certainly do have a mound of evidence to fall back on. Consider the

iShares 20-Year Treasury Bond Fund

(TLT) - Get Report

. Its current price is well below short- and long-term trendlines. And the 50-day recently crossed below the 200-day ... a price movement pattern known as a "death cross." (Note: The last "death cross" for TLT occurred more than two years ago.)

It may be reasonable to agree that long-term Treasuries are facing hardship. Or perhaps ... the potential rewards of owning TLT over the next year (e.g., yield, capital appreciation, perceived safety, etc.) are not commensurate with the possible risks (e.g., loss of principal, excessive volatility, etc.).

On the other hand, it may be a bit nearsighted to dismiss the entire community of debt instruments. For example, over the past three months, the

S&P 500 SPDR Trust

(SPY) - Get Report

has put together 5.5%. The fiscal cliff impasse kept the market range-bound for a period of time, but the market has since gone on to hit a five-year peak; similarly, TLT has logged a dismal 3.1% decline.

Nevertheless, a wide range of bonds has provided admirable risk-adjusted returns over the period.

SPDR Convertible Bonds

(CWB) - Get Report

garnered 4.1%,

iShares High Yield Corporate

(HYG) - Get Report

registered 2.2%,

SPDR Barclay Emerging Market Local Bond

(EBND) - Get Report

amassed 1.9% and

Market Vectors High Yield Muni

(HYD) - Get Report

served up a tax-free 1.3%.

Granted, if a steady stream of outflows from intermediate- and long-term Treasuries turns into a stampede, higher Treasury yields may put pressure on other fixed-income vehicles. Indeed, if we witness a full-fledged exodus at a pace that the

Federal Reserve

isn't able to offset through its quantitative easing policies, stock investors might also find themselves struggling with a sharp uptick in the 10-year. After all, most of the country's mortgage and car loan euphoria is dependent on subdued five-, seven- and 10-year notes.

As of this moment, however,

iShares 7-10 Year Treasury

(IEF) - Get Report

has not entirely thrown in the towel. For the better part of nine months, it has traded in a fairly stable range.

It follows that a slow rotation out of lower-yielding Treasuries might be manageable and moderately bullish. Conversely, a rapid-fire rotation would likely bring bears back to the dance floor.

Regardless of how it ultimately plays out, it's important to recognize that not all bond ETFs are cut from the same cloth. I maintain a healthy allocation to emerging market bonds, short-term high yield bonds as well as munis in taxable accounts.

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This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Disclosure Statement: ETF Expert is a Web site that makes the world of ETFs easier to understand. Gary Gordon, Pacific Park Financial and/or its clients may hold positions in ETFs, mutual funds and investment assets mentioned. The commentary does not constitute individualized investment advice. The opinions offered are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial or its subsidiaries for advertising at the ETF Expert website. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert at the site.

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