Think back to the blaring headlines about the Great Promotion Rotation in the financial media in 2013. Perhaps the media circus started in January of that year when The Economist asked the question of whether the rise in bond yields signaled a “flight” out bonds and into equities. It was probably an earnest and right-minded question asked by The Economist, but you know our friends in the greater financial media; get a good story and flog the hell out of it to harvest eyeballs. Reality be damned, man, it’s the eyeballs that matter!

As the mini-hysteria grew that year we called it a “Great Promotion” (by the financial media) in expectation that the Continuum’s limiter (the red monthly EMA 100 on the 30 year bond yield chart below) would hold once again, just as it had during Bill Gross’s inflation hysterics that signaled a top in inflationary angst in early 2011. By the end of 2013, our ears were ringing with the media buzz and drone about the “Great Rotation”.

Then? Poof! The ‘limiter’ limited, yields went back down, stocks got rocky over the following 2 years and Goldilocks eventually took over once again amid the Brexit/NIRP buying opportunity that developed in mid-2016 (Ref. AMAT Chirps, B2B Ramps, Yellen Hawks and Gold’s Fundamentals Erode from May 30, 2016).

So that was the sordid history of the original “Great Rotation” media promo. But the actionable ‘career maker’ rotation that may lay ahead is one focused on a would-be bottoming and steepening of the yield curve as opposed to the flattening that has been in place ever since the Fed’s maniacal and brilliant Operation Twist forced it to decline impulsively in 2011.

To review, Op/Twist manipulated the curve by buying up long-term bonds and selling short-term bonds, thus enforcing by decree the official view that inflation must be “sanitized” (Fed’s word, not mine) out of the picture. Here’s a chart with a message from John Lee Hooker for equity and asset market bears: “Boom boom boom boom, I’m gonna shoot you right down”…