When 1-dgs10/dgs2 closes below the orange line at 0.1013, it all comes tumbling down.
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Real interest rates will probably start to fall soon because of stagflation. Real interest rates can be measured by subtracting inflation expectations FRED:T10YIE from US treasury yields FRED:DGS10 . Treasury yields will likely fall along with unemployment as measured by initial claims FRED:ICSA . Initials claims has started to slowly rise and when it...
Real rates look like they are about to turn over. This should mean that interest rates should drop faster than the inflation. A good proxy for this is silver which looks like it is touching a support line and the 100 MMA.
It's when it normalizes you better watch out. I think we've put in a generational top and we go lower. Can't rule out a continued rally as the state of inversion can last a while.
calculating real yield, DGS10-T10YIE reference fred.stlouisfed.org/series/DGS10 fred.stlouisfed.org/series/T10YIE
10 Year Treasury Elliott Wave Analysis. The Big question here, is Wave (A) actually Wave (1) ?
Where spy tops out is questionable. 4800, 5000, 5250 ? Who know, We are now in the later stages in my opinion. Keep bets small and use stop losses and options to manage risk. A lot of money can be made or lost in this final stage. Don't be greedy and manage risk. Volatility will remain high so keep positions smaller than usual.
If this pan out and the frank gets erect it could spell trouble for risk assets
FRED:DGS10 Thought I would check out the the 10 year after some crazy price action and decided to analyze this on a longer term time frame. The Laguerre RSI doesn't show much weakening compared to price which indicates to me there could be a possible pop up even making higher highs.
So we have synchronized movements between long-term treasury yields (5, 10 and 30 years) and cyclicals (airlines, oil companies, carmakers, cruise lines, etc.) regardless of the fundamentals. If these yields are expected to continue increasing in response to a higher rate of inflation, a continuation of the trend in cyclicals would also be expected. The peak of...
The 10Y and 30Y markets seems somewhat able to "anticipate" rate hikes.
Fed lost some control from March 1969 to Sep 1981. Since then, they are master or the ring, and the curve! Notice how gold behaved inversely during the 1970's. Expect the unexpected.
This is comparison between bonds and spx.
I sometimes feel the big dogs send messages through chart patterns, I wonder if this is one of those times.
Deductive Thoughts: Global interest rates continue their decline towards zero. Soon, most major economies will be under the pressure of deflation. On the one hand, negative interest rates have shown to be not viable to boost inflation , risking a debt crisis of the private sector piling up "free" loans. On the other hand, quantitative easing also shown to be not...
This is not 95' or 98' two completely different rate cutting cycles with completely different economic conditions. You should focus on 2001 and 08' for more accurate assessment. If fed cuts more than 3 times we could see an acceleration of the steepening of yld curve which would not be greeted well in my opinion.