US Curve is pricing some kind of slowdown (specially due to higher inflation than expected) As you can see the 10yrs US yields- 3yrs and close to 0.00% Due i expect more escalation of Russian War, not just against Ukraine, also against Moldova and Georgia. The conflict will continue for many months causing a potential global recession. Central banks may have...
Currently the Federal Funds Rate is at 0 %. The Yield Curve is close to flat around 0.5 %. Inflation is at 7.5 %. IF the FED raises the Federal Funds Rate 0.5 % then the Yield Curve will go negative and start a recession. The FED cannot stop the current inflation without the yield curve going negative creating a major recession. This means that stagflation is...
Part 2 This is the second part of the macro analysis series. In this part we'll focus on analyzing the current situation around the US bond market and the US dollar, while trying to map out the future depending on how the Fed and the economy move. You can find the rest of the analysis on the links down below. After going in depth about interest rates, the USD,...
The hypothesis is that since 2018 BTC has behaved like a high beta equity. As monetary conditions tighten (yield curve flattens between 2 year and 10 year treasuries), investors move away from risky assets like BTC. When the yield curve moves towards inversion the market's appetite for BTC decreases significantly. Market participants may recall the many times in...
Fundamentals : See previous updates.... Technicals : The price moved from bottom to top of the band in what appears to also be a break out and a retracement to support. On top of this, we can see that a chart of US bond yields, which predict the direction of the USD, remain supportive of the USD going forward. Therefore, buying dips on USDJPY. For several other...
Danger above zero. Recessionary bear markets are characterized by danger as defined as by inverted yield curve (above zero). This was the case in previous 3 recessionary bear markets. Bullish so long as not above zero.
When people live on hopium they detach from reality and refuse to look at the bigger picture Analysis paralysis is an inability to make a decision due to over-thinking It’s usually accompanied with an overall sentiment of wishful thinking in the financial markets This translates to extreme fear and greed, the more fearful or greedy investors are, the...
As we approach a world where the Fed look set to hike in March, with 3.4 hikes priced by Dec 2022- we are also now hearing an open discussion around allowing maturing securities on its $8.8t balance sheet to run off (QT) -so, it's worth going back to the Dec FOMC minutes for real insight. With the market having had time to pour over the wording, it feels clear...
Bank of America attempted a breakout in October, but some newer patterns suggest a potential change of direction. Notice the series of lower highs since December 1 as BAC tries to hold roughly $43.60. That’s a potential bearish triangle. Interestingly, the support line is near the June high of $43.49. Second, most of the candlesticks recently have been solid,...
We stand at a crossroad. First, market conditions mirror the global economy in 2018. Back then, the FED was getting to raising rates when the Eurodollar curve inverted. Flattening US bond rates too indicated that economic growth in 2019-2020 would would slow. Now, the FED is expected to be aggressive on asset purchases taper in next week's meeting. Three rate...
As Stocks & Crypto push higher, even yields ticking up with a hint of a Gold rally. It is my opinion that stocks simply can't be this inflated for long. Yes we need to wait for the Fed to reduce QE pace. However, one needs to get Volatility while it's cheap. Looking for a short term bounce in the #VIX to $24 with this beautiful double bottom / W pattern.
Data released Thursday showed that U.S. GDP growth slowed sharply to a 2% annualized rate in the third quarter. Meanwhile, investors continued to price in rate increases by the European Central Bank, while dismissing President Christine Lagarde’s effort to push back against such expectations. Market expectations of higher interest rates has brought out bears,...
Bank of America is jumping to new 14-year highs after a strong quarterly report. This raises an important question: Will the megabank now return to its previous all-time highs from before the subprime crisis? BAC peaked at $55.08 in November 2006. It inched lower over most of the following year, before the selling cascade hit. Prices hit a nadir of $2.53 in...
Here you can see I am a slow and patient bear who ate his oatmeal and slept away Q4 & Q1 For all the stores were bear as well, So I bought moar oatmeal. DXY looks like oatmeal Not that I know anything ser's........ I like oatmeal Me can only buy me oatmeal with DXY Not really feeling like explaining this........I'm sure me shall be shamed for loving me oatmeal...
I expected the 1.145 area to act as a good resistance level, but the extend of yesrdays pullback was something I did not see coming. Let's see what CPI numbers do before throwing in the towel
The yield curve, calculated as the difference between 10-year and 2-year treasury yield, is a great indicator to watch to figure out Bitcoin's direction. When the yield curve steepens, it means economic growth and inflation and when it flattens, it means the reverse. Inflation was not a concern until last year after central banks across the world coordinated the...
The Dollar has very large Trendline support as well as the 50SMA. The pressure this exerts can be extreme. The rising trend indicates the potential for an extreme move in the Rate of Change (ROC) once again. The move will be very strong as 2 events are in play: 1. DX Hoarding 2. Net Drains @ FED and US Treasury * Of Note, the future of stimulus was made...
Q: What has the highest probability of occurring? Since early July there have been 4 tests of 132.000 resistance. There is a combination of 2 classic patterns forming at resistance. The double top, where both tops have been rejected at 132.000, is currently valid. The head and shoulders, the head consisting of the double top, would need to break the neckline...