Hello everyone,
I drew this pattern a few days ago when analyzing the SP500 behavior in recent weeks. I believe the market boogeyman is not gone and that today was just a taste of what he has in store. 2% yield will not be in July. It will be here in April or June... and as early as March 29th.
The yields are behaving extremely bullish lately. The blue lines represent an ascending channel that is consolidating at higher lows. In the past few days you can see that the pattern is returning to the center of this channel less and less. It's breaking out of the channel to former a sharper one. So we've got increasing curvature.
I believe the yields have a strong possibility of going parabolic unless the fed takes control. Given JPOWs speech, he is going to be reactionary and not prevent it. So it's definitely in the realm of possible and trending towards it. I believe this could have severe implications for the equities market. I've drawn a purple 2% yield line which is being eyed by the market as a whole as a possible 'catalyst' for a 20% correction. At 2%, the yield allows the bonds to break even by surpassing what JPOW says is inflation.
The bond market is not believing JPOW and the Fed. They seem to believe inflation is over 3% and as high as 4%. They also seem to believe that it is not transitory. The yield is also becoming suspicious. I believe there are a number of short sellers hitting the US10Y in an effort to push the fed to raise rates. I have no proof. Only a gut feeling based on observed price action.
Be careful. A parabolic yield could induce a panic leading to a possible limit down on the NASDAQ/SP500. You're welcome to view my forecast I made on March 12th. We are seeing some deviation but the overall pattern remains.
If I am trading right now I would be in cash or in puts. Please trade carefully. The market may experience extreme volatility as the TINA effect weakens. (There Is No Alternative -- meaning stocks have the best return possible and there is no competition)
Disclaimer: I am holding puts and have been for a few days. I am not a financial expert or advisor. Trade at your own risk.
I drew this pattern a few days ago when analyzing the SP500 behavior in recent weeks. I believe the market boogeyman is not gone and that today was just a taste of what he has in store. 2% yield will not be in July. It will be here in April or June... and as early as March 29th.
The yields are behaving extremely bullish lately. The blue lines represent an ascending channel that is consolidating at higher lows. In the past few days you can see that the pattern is returning to the center of this channel less and less. It's breaking out of the channel to former a sharper one. So we've got increasing curvature.
I believe the yields have a strong possibility of going parabolic unless the fed takes control. Given JPOWs speech, he is going to be reactionary and not prevent it. So it's definitely in the realm of possible and trending towards it. I believe this could have severe implications for the equities market. I've drawn a purple 2% yield line which is being eyed by the market as a whole as a possible 'catalyst' for a 20% correction. At 2%, the yield allows the bonds to break even by surpassing what JPOW says is inflation.
The bond market is not believing JPOW and the Fed. They seem to believe inflation is over 3% and as high as 4%. They also seem to believe that it is not transitory. The yield is also becoming suspicious. I believe there are a number of short sellers hitting the US10Y in an effort to push the fed to raise rates. I have no proof. Only a gut feeling based on observed price action.
Be careful. A parabolic yield could induce a panic leading to a possible limit down on the NASDAQ/SP500. You're welcome to view my forecast I made on March 12th. We are seeing some deviation but the overall pattern remains.
If I am trading right now I would be in cash or in puts. Please trade carefully. The market may experience extreme volatility as the TINA effect weakens. (There Is No Alternative -- meaning stocks have the best return possible and there is no competition)
Disclaimer: I am holding puts and have been for a few days. I am not a financial expert or advisor. Trade at your own risk.