📌 This diagram portrays the final stages in the economic cycle which I called in 2019. The position arose after Equities began extending beyond reality; all sellers needed was an intending cause. The construct of the ingredients here are clear and simple, after Fed cleared the runway till 2022 you can see the risk coming out of bonds. Of course now it...
So much for the 5th wave... the formulation has truncated after the payrolls report. This is an example of an erroneous freeing. In similar patterns, the rebound will translate in a 5 wave impulsive sequence which is somewhat cramped after the knee-jerk reaction from covid. The appropriate positional response to the lows here is to ride the pig , what we are...
Downside remains, 17:17:45 (UTC) Fri May 22, 2020
Weekly Downside for 2 yr yield Short 01:57:49 (UTC) Tue May 19,
This might contradict our price action analysis but this is something that needs to be taken into consideration. As many know, German 5 yrs bond yields - US 5 yrs bond yields differential is regarded by many intermarket analysts to be leading indicator for EURUSD. EURUSD is supoosed to follow this differential and some traders make a strategy out of this. And...
An important chart update for all early and late cycle players, the lows in US10Y Yields are not yet locked and this is holding the window open for a final leg to the downside cooking in Global Equities and risk markets. A lot of buying interest in bonds towards 0.85 / 1.00 highs which will be enough to keep the downtrend in pay. I am looking for a full ABC...
Negative rates are finally here for the US with the 6mo t-bill ticking below -2bps (feed is slightly delayed here). Simply meaning that you will now need to pay the US government for 6mo cash deposits. This is the only way they can continue in the "end game" strategy. It is a well known phenomenon that the US 2's 5's was ringing alarm bells last year , those...
A deliberate soft closing down at the 1.50 lows (instead of breaking through allows for an underestimation in the bounce); here, the systematic approach of buying the dip deserves victory. We can cast some light together on playing through the flank: In the extraordinarily traditional sense an inversion which we are looking at always leads to a recession and...
I have been talking about the curve steepening for some time after we cemented the lows. From a technical perspective, the breakout is implying a test of 60 over the coming weeks and months. The US 2s 5s Bond Curve also looks to be triggering a major break up: This will reflect a medium term breakout with large forces clashing against each other and...
A timely update to the 2s5s US Curve which is breaking higher with the resteepening after flattening from 2016. This breakout indicated we have marked a meaningful base with the next target in play at 29bps which is the measured target from a breakout. (1) Every other time this happened it ended badly for the global economy via recession. (2) A Fed that lags...
You have opened the grave of an economic cycle. Before we dig deeper into the nature and consequences of our discovery, we will discuss the background to the thesis and consider first what we know from history a few lessons; (1) Every other time this happened it ended badly for the global economy via recession. A (2) A Fed that lags and finances the Whitehouse...
A timely update to the US10Y Yield chart as we breakout with November highs in scope. We will not be covering US fundamentals here today and instead will focus on key technicals in play. For the flows in our map for today and the rest of 2019 we have the key levels in play (highly recommend adding all to charts): Steel Support => 1.65 Strong Support =>...
Let's start by digging deeper into the long-term charts in Gold, Copper and US 10-year Yields. Firstly with Gold: Next, Copper: Lastly, US10Y: After recapping the old maps we have gained a perspective in the macro flows; it is clear that Gold is once again finding a strong bid and Copper is following as collateral. A bullish break up...
A mixed NFP with inflation seeing the consequences via wages presents a good time to review the latest rate differential map: The floor has been placed, expecting Euro to begin rallying as we enter into the final pages of the cycle. US numbers are holding but is clear they wont be able to hold more than Q1 2020. Smart money will now position before waters...
Here we are tracking the highs in SPX for Q4...with Fed doing the heavy lifting once more and keeping the US on life support with another cut and QE 'lite' .. the moves in this Quarter will likely be supported at 2750. Equities are facing increasing headwinds from valuations. The strength of domestic demand in US has kept Equities held up for longer than...
The market is growing impatient with the Fed not cutting more aggressively. Here markets will continue to trade expectations of steeper curves in the US and flatter across the majority of G10. Remember the short-end of the curve is influenced more by CB's, whereas the long-end is not shaken easily as anchored to market view of "neutral rate". With most of the...
Tracking a break of the channel here; yields are beginning to test and all it will take for us to see a clean sweep is a daily close below. Eyes on 1.80 and 1.65 with a break; whilst to the topside a bulls need to take 2.654 to change the current direction. For the map a very clear: Strong support 1.65 <=> Soft support 1.80 <=> Mid point 1.95 <=> Soft...
Oppression will continue, eventually this let will continue down towards 1.423%; the target for wave 3. We would have to break higher than 2.02% to question whether the nature of this downside move remains intact. There is a lot of support as we widely tracked here in advance. The bounce over the past few weeks is a corrective process that should not exceed the...