TVC:US30Y   United States 30 Year Government Bonds Yield
Idea for Macro:
- Credit Cycle turned down from top of Risk Range.
- Global Credit Impulse negative, US Systemic Liquidity Flows turning down, Fed Balance Sheet 5yr avg . at top of risk range.
- Demand-push Inflation at top of risk range, in 40 year downtrend.
- Implied Volatility vs. Realized Volatility reaching a critical level.
- PC ratio reaching low levels (signals investor complacency).
- SKEW at an ATH . Perceived Tail Risk is at an ATH .


Speculate a correction in equities this Summer, then a large correction EOY-Q1 2022.

GLHF
- DPT
Trade active: Reminder:
Should the deep correction across asset classes occur, Bonds are typically the first to recover, then Gold, then Stocks.
Trade active: Risk Indicator flashing warning, not sell yet.
Risk Model suggests possible Long VOL signal:
- Tech shows possible reversal patterns: - Low Market breadth in tech rally, bearish divergences.
- Lumber, Gold, Copper, commodities signal reversal.
- Big VIX call flow.
- Yields and DXY suggest sell.
- Only Oil seems to be holding up markets.
Trade active: Watch for global markets and futures red in the pre-market for a red flag.
Trade active: Financial sector gives a signal:
Trade active: NQ confirms the clean short entry:
Let's see if there is continuation
Trade active: EM's beginning their interest rate hikes. Global risk appetite decreasing.
Trade active: China Credit Impulse 12M change again drops
Trade active: This is relevant news: https://www.wsj.com/articles/credit-suis...

CS backed off lending to Softbank. Softbank is basically Cathie's ARK but for QQQ.
Easy money is ending.
Trade active: Fed Balance Sheet YoY % drops off,
Fed raises RRP rates and overnight RRP shoots to nearly $1T,
Margin debt at ATH,
Global credit impulse now negative...

The market will continue to rise. How? Where is the money coming from?
The rally up till now had been fueled by easy lending, but the Credit Cycle has turned down. Liquidity flows are decelerating and being pulled out of the system.

Who now will bid up the assets bought at these lofty heights?
Trade active: RRP skyrocketing. It's simple. Bank Reserves > Credit > Equities. Liquidity outflows lead market movements.
Trade active: SKEW typically frontruns big moves by a month or 2:
SKEW rises as a result of big players with inside knowledge of a catalyst coming.
Trade active: US Credit (Junk + Leverage) rolling over:

Comments

Do you think mismanagement of inflation will be the catalyst? If we correct for calculation changes we have very high inflation over the past month or so.
Reply
@SunnyG18, It's a possibility that monetary policy will be a catalyst, but I don't think a catalyst is needed for a market correction. Credit and liquidity flows have already turned down, so markets will follow shortly.
Reply
Agreed.
Reply
whats the effect to the GOLD ?
Reply
DarkPoolTrading aruptransport
@aruptransport, Gold goes down in this case, but should recover before stocks.
Reply