Yield Curve Inversion Watch Chart - Fed Has To Cut!If you’re worried about a recession, you should be watching the Yield Curve Inverting.
Historically, an inversion signals a recession, but with a lag.
We can see this on the chart whenever the yield curve hits 0%
This shows the 2Y yield higher than the 10Y which is a signal that the market expects slow economic growth.
To counter-act the inversion, the Fed cuts the EFFR, although they are always late.
One would think that the Fed would learn from history, and get ahead of the curve this tim
2yr
2Yr Yield creeping up slowly$TNX is closed atm but if the 2yr is an indication it may open higher
We re-entered long yield after FED day in DEC.
Sold puts on $TYO & bought common
Didn't go heavy because Monthly chart is a tad tough.
Weekly 2yr trading decently above avg's again
So far so good.
We were bullish on STOCKS but that was late Oct/Early Nov, then went bearish for a bit, & are now NEUTRAL.
EDIT:
Keep in mind that in BULL MARKETS items can remain OVERBOUGHT for long periods of time.
10yr-2yr Inversion VS Stock market bottomThe last two times of market recessions, Dotcom and the Great Recession both times the stock market did not hit bottom until 3yrs after the inversion happened.
Meaning we are only 129 days into this one. I would take advantage of this current rally and not get overly long on positions, but sell out of positions into strength.
The FED has made it clear there will be more pain ahead, and they will only strengthen their resolve next meeting.
Either way, a .50 basis or a .75 move is on the table
2yr & 10yr Bond with M1Nothing to be concerned about here... if you're an ostrich.
Inflation spiraling out of control, while bonds reflect the loosest monetary policy possible with a dovish Federal Reserve hand-wringing about tanking the markets.
M1 has gone beyond parabolic, practically vertical.
The Fed communicated this week that they will try and control future prices but they're not going to do anything to reign in current "transitory" prices.
Fed Chair Powell "hopes" history will say the current regime got t
SHY - Lock 2Year Bill YieldSeems no one wants to discuss the Short End of the Bond Curve.
After performing a 30 Bip Sequence, the Big Move to Consolidation - the Monthly Chart
illustrates how NQ Elevator Up can resolve.
The Fed Fund Futures were dragged into 2022 for 2/2 Indicated @ 72%.
007s on the Short End, believe it's all good, these will backfill and we'll rally
30 more Bips to Our Favor.
Not going to happen, period.
Tech, of course, has shrugged off the impending moves by the Federal Preserve.
Moving Vertical
Next Fin. Crisis?It's been more than 6 years since the last major financial crisis occured in 2008. If we assume financial crisis come out almost perodically in every 8 - 10 years then I think it's time to start thinking whether we are close to the next one.
10Y US treasury notes have always been preferred investment tool for non-risk takers regardless to the financial environment. But what about 2Yr treasury bonds? Can it tell us tell of something different?
So I looked at how the spread between 10Y and 2Y not
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