For the last 40 years, I (we) have invested in a never-ending Bull Market in stocks. During this time: Stay the Course and Buy the Dips worked. But as Ray Dalio said recently: THE PERIOD OF EASY MONEY IS OVER! The new paradigm will either be Zero or Rising Rates, neither of which will be kind to long term investors. The BIG MONEY has already begun to or...
First - if you think markets always move opposite to yields, please be open to learning something new. Covariance, in statistics, is the relationship between two random variables. This chart indicates periods of negative (blue) and positive (yellow) covariance between the 10 year yield and SPY. If you think about it, this makes sense because there are times...
Not much has changed since the last market update. The liquidity that has been driving these bubble markets for decades has hit a brick wall with the rise of the 10YR-Bond Yields as the primary guage. The Fed has no choice but to extinguish this raging inflation by raising rates. What came first: the chicken or the egg? Some say that this is politically...
Taking the long view of the last forty years of prosperity where BTFDs and HOLD THE COURSE were the prevailing mantra. But that is paradigm is now over and the new paradigm has yet to emerge. My GURUs are split between A STOCK PICKERS MARKET and THE FINANCIAL SYSTEM WILL CRASH, But Precious metals and other inflation hedges. But what are you going to do? That is...
TNX at this strong local resistance, if we break above we can target 2.559-3.036, if we reject look for a dip to trend support (1.45-1.50) like and follow for more! 💘
The 10 year treasury note (TNX) is following previous tightening cycles very closely. Since the COVID crash, TNX has been in a clear uptrend, but eventually it will hit a breaking point. The Federal Reserve is signaling they can raise interest rates as high as needed to calm inflation; however, there is a descending resistance line going back decades. This...
Usually the flattening is a lot more grindy and choppy and it takes more time. This time its a straight nose dive. This probably means that the snap back is going to be fast as well, but you just don't know when the bottom is going to come, so trying to bottom fish is going to be a double edge sword as always.
Not a good sign for the equities. A US recession the next 12 months?
The charts is telling me the market as to rates is topped . So I see the FED taking baby steps as the data will start to see Unemployment to be on the up swing and that supply chain to open up
It just gets curiouser and curiouser. Will Powell act? He is definitely no Volker! About 1982, under Volker, 30 year rates hit 18%. What next: a long period of low rates with catastrophic inflation or ... door #2 - Higher rates and a stagnant or falling market. I may be wrong, but I suspect the FED doesn't want to hurt THE MONEYED CLASS unless they have to.
Quick Analysis on 10 Year Treasury Yield on a 1D Linear Chart. 1) The US 10 Year Treasury Yield has been respecting a falling channel for multiple decades going back to the 1980s. 2) It has broken out of the top trendline of the falling channel with a recent re-test of the S/R line. 3) The measured move of the falling channel would bring it back to Pre-2008...
TNX is topped. On major resistance area. Only possible way is going down.
My target for the ten year has been reached and my short on bonds is done. I've reversed and gone long now. Good luck!
This chart of the TNX shows it all. Now zero interest for awhile or rebounding rates and their consequences.
The yield curve between the 10 and 2 year has been collapsing since March 2021. It is erie to behold that the inversions of the yield curve were occurring 1-2 years before past recessions occurred in 2000 and 2008 and even before the recent pandemic. One can see when complete inversion occurs when the basis point difference goes BELOW ZERO. It would seem quite...
Things get very interesting from here. Stocks did not follow bond prices lower as bonds made new low. Which do you buy here? Stocks or bond? or.....Do you sell stocks and buy bonds? or just sell stocks? Wonder what @allstarcharts thinks?
When ABCD-ab-12 are already competed, and wave 3 of c is already underway, the market is left with very little time to think what to do next. As I said earlier - the move in treasuries is unstoppable and will cause a major market crash, bringing SPX to ~1500, EURUSD to below 0.87.
The attached chart shows 40 years of declining 10 year rates. As we all know, that rate is the basis for mortgage rates and just about everything else. During that half cycle the housing market boomed, the stock market boomed and generally speaking, corporations and individuals prospered. But that trend has ended. Thursday I would have said that rates would either...