As the 10YR Treasury yield surpasses the average dividend yield of the S&P at 1.5%, risk assets will lose their shiny appeal and become a much scarier thing to hold. As rates rise, growth companies usually don't do as well since they can't borrow money as cheaply to fuel their rapid expansions.
If you look at the all-time 10yr Treasury Bill it looks like we are on trend to retest an old resistance line, which is at about the 2.39% range. If it were to hit that, there would be a huge flight from equities into fixed income because then decent returns could be achieved while remaining safe.
To play this, go long SPXS. It is levered 3x to the downside for the S&P 500; so every percent the SPX drops, SPXS rises 3%. Maybe 1 to 3% of your portfolio since it is levered 3 times.
10YR retesting resistance trend line
10YR could hit 2.39%; towering over the SPX's average yield of 1.5%
This is not investment advice, do your own due diligence and gauge your own risk tolerance.
If you look at the all-time 10yr Treasury Bill it looks like we are on trend to retest an old resistance line, which is at about the 2.39% range. If it were to hit that, there would be a huge flight from equities into fixed income because then decent returns could be achieved while remaining safe.
To play this, go long SPXS. It is levered 3x to the downside for the S&P 500; so every percent the SPX drops, SPXS rises 3%. Maybe 1 to 3% of your portfolio since it is levered 3 times.
10YR retesting resistance trend line
10YR could hit 2.39%; towering over the SPX's average yield of 1.5%
This is not investment advice, do your own due diligence and gauge your own risk tolerance.
