What this means is that the stock market as represented by the S&P 500 is bullish and continues to climb while the bond market is saying that money is migrating to the safety of bonds and so driving bond yields down and bond prices up. The bond market is saying that today's environment is a "flight to quality" environment and that "risk on" assets are simply too risky. Since the bond market is typically viewed as the "smarter" of the two markets, bond action could be bad news for stocks as we move into May.

The Week Ahead: What to Expect

Major economic reports come our way this week as follows:

Tuesday: Case/Shiller Home Price Index, consumer confidence, Chicago PMI.

Wednesday: Federal Open Market Committee meeting announcement, April Institute of Supply Management, construction spending and ADP private employment.

Thursday: Weekly jobless claims

Friday: April Non-Farm Payrolls, Unemployment Rate, service sector ISM, factory orders.

Action Plan

Never a dull moment as central banks around the world struggle to fight off deflation and depression and promote growth. We'll see more of the same this week with announcements from the European Central Bank and U.S. Federal Reserve. Will easy money be able, yet again, to offset terrible macro economic data? Stay tuned. Wall Street Sector Selector remains in "Red Flag" status, expecting a summer swan dive ahead.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
John Nyaradi is Publisher of Wall Street Sector Selector, a financial media site focused on news, analysis, and information about Exchange Traded Funds (ETFs) and global financial and economic developments. John's investment articles have appeared in many online publications and he is a frequent guest on numerous financial media outlets. His book, Super Sectors, is published by John Wiley and Sons and included among the "Year's Top Investment Books" in the 2011 Stock Trader's Almanac.

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