The market is applying the rule of thumb that inversions in the 2y10y curve are 12-24 month leading indicators of recession. This rule of thumb no longer applies in the global NIRP environment. 2008 saw fewer leading inversions than 2001. This time time there were none at all—the crash has already begun. SPY <150 in 2020.
Comment
⋅
7. should read Feb 2018-2019, apologies.
Comment
⋅
Sorry, the indicators screwed up the alignment of the text. New to this...
Comment
⋅
You can make the indicators smaller and drag them to the bottom; makes it more readable.
Comment
⋅
Also in error: the 3m10y was inverted for 3m months until last Friday, not a full year. Doesn't really affect the analysis much.
The future is up by 0.5% now, whats your strat on shoring the SPY? I have 30% put on QQQ over the weekend, and looking for adding my short positions along the market rally up.
jlamadehe
⋅
@daweizhang0202, looking for short positions on the SPY if resistance holds at 296.50 or more likely 297.50; expecting a reversal intraday Monday or a bounce of the 20 DMA. Otherwise will reassess when we approach ATHs. My original call was for a bull trap in the run up to Oct 31. While I think the probability of a new high is lower now, it's still a possibility.
Here is some more on the SPY strategy for next week: imgur.com/VZlxtLV
Tomorrow specifically I'm looking at AA, SPR, AAL, and UAL for fall-out from a potential new front in the trade war (US v. EU) surrounding the Airbus/Boeing WTO decision released Monday morning CET. SPR in particular looks like it's on the verge of a collapse through the 200 DMA. All those stocks have particular exposure to Airbus's supply chain and will be affected by the US's proposed schedule 1 tariffs (check the dept of commerce for the schedule).