📍 This chart update comes from the ' Alpha Protocol - Seeking Immediate Extraction ' The cramped inversion should aways be considered the end game of an economic cycle. But of course we will get the v shapers and naysayers who obliges that stonks only go up. The space available to operate against the Robinhood army is becoming more flexible. Sharp speculators are...
What are real interest rates? The real interest rate is the rate of interest an investor, saver or lender receives after allowing for inflation. It can be described more formally by the Fisher equation, which states that the real interest rate is approximately the nominal interest rate minus the inflation rate. Now, two scenarios unfold. One, the gap in the...
📌 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...
Weekly Downside for 2 yr yield Short 01:57:49 (UTC) Tue May 19,
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...
Interest rate cut function is getting weaker
expecting treasury yields to normalize this year.
Play may go as far a 1.115%. A counterattack from FED needed to save Equities... BTFD always wins? Not this time...When major forces on both sides come together, it comes down to a sort of exchange case 1, which we shall call: " Selling life as expensive as possible " Buyers play ... Sellers happy to exchange at the resistance line, but since FED is...
FED interest rate cut refilled. If you look at the forward interest rates on 2-year US bonds, the market has been pushing for further interest rate cuts in recent days. The figure shows that, technically, the Fed's benchmark interest rate starts at 0.96%. Therefore, I believe the dollar may start to weaken in the coming weeks.
This is a Weekly Chart of the US10Y yield minus the US02Y yield. (This composite is sometimes referred to as the Yield Curve and if the spread or difference goes below 0.000, then that phenomena is termed to as Yield Curve Inversion). This spread is widely followed worldwide as any number below or close to 0 tends to indicate impending slowdown in the US Economy,...
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...
Since the YC inversion in August last year (2019), there has been a "crack" in correlation between the US02Y and USDJPY. I expected the YEN to strengthen as the Japanese short the dollar against the YEN to hedge against the rising US Govt bond prices (due to the rate cuts) considering Japan holds a significant amount of US Govt debt. My initial thoughts on this is...
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...