Mama said there’d be days like this (30-year Treasury yields in blue, S&P 500 in red):

Click for sharper image. Source: Yahoo! Finance

Today’s action showed much a higher standard deviation move for Treasuries than stocks, and it may be a sign of things to come, as there has been a very strong correlation of Treasury yields with stock prices (inverse correlation of bond and stock prices) for the past couple of years:

Click for sharper image. Source: Yahoo! Finance

Note the divergence for the last month or so. Bond traders haven’t been feeling the same relief as stock market participants since July’s mini-panic. I’ve heard it said that the bond market has a Wharton MBA and the stock market has a masters from a South Florida community college. My money says the stock market chokes and comes down with bond yields right through the July and March lows in a long series of moves like today’s.