This is nothing new, really. People who have been in markets long enough know that when short term bond yields (3 month and 2 year, for example) come up to meet and invert to a higher yield than longer term bonds (like the 10 year, 30 year etc) that it often precedes a large market sell off as well as a recession that affects most everyone, not just stock...
📢 Yield curve inversion alert! Here's what you need to know: 📉 The 10-year minus 2-year yield curve has inverted 📉 This occurrence, where the shorter-term yields surpass longer-term yields, often raises concerns about the economy's health. Historically, such inversions have been associated with impending economic downturns. The inversion of the yield curve is a...
What are the conditions we need for a crash? In my opinion we need to see these conditions coming together before we can say that we are in a crisis environment. History showed us that before we had a crisis we 1. first saw the yield curve (US 10 year bond yield - 2 year bond yield) inverting. 2. then we saw the unemployment rate rising. 3. the yield curve...
The comparisons to the beginning of dot com are uncanny. I compared countless indicators and the current price action is identical to the dot com beginning. Additionally, the duration of the yield curve inversion is identical and the % of the drop is identical, almost to the decimal. The current contraction took 5x as long to reach this point as compared with the...
We have an inverted yield curve today - When the near end yields or interest rates is higher than the far end, we have an inverted yield. What is its implication and any attributes? To understand the implications of an inverted yield curve, it is crucial to know what a yield curve is and how it works. A healthy yield curve – It shows the relationship between...
In this post, I will present a market analysis with a focus on recession metrics and indicators. Right now, many of them are sending a recession warning. Home Prices - U.S. home prices are surging higher at the fastest quarterly rate of change on record. (See chart below) This extreme rate of change in home prices is occurring as U.S. 30-year fixed mortgage...
The 10Y-03MY yield curve is the lowest ever. It looks like it cannot go any lower. Is it about to turn? And will it bring DXY up with it? An option is to buy AMEX:MINT or LSE:IBTE to play that trade.
The US Treasury Yield Curve is currently inverted, meaning short term interest rates higher than long term interest rates. This unusual occurrence, called a yield curve inversion, has historically been a very reliable indicator of an upcoming economic recession. Since World War II every yield curve inversion has been followed by a recession in the following 6-18...
(4/10/2023) Monday - I wanted to publish this chart so we can follow the effect the credit spread had on the S&P 500 (SPX). As you can see the inverted candles correlate well with the SPX. Note the candles are inverted and the SPX is not, just to show better correlation. At the time of publishing there has been a significant move in credit that supports underlying...
In this Video I discuss The technical analysis of the SPY ETF which is a proxy the S&P500 that is often a tell on general market movements. I also discuss broader market Macros I have been watching including last week's and next weeks economic events. We also discuss some recession indicators, and other charts that show headwinds and tailwinds to equities. In the...
Having covered Gold & the Equity Index last week, this week we will look at how we could leverage both to trade on the move we’re watching! Quite a happening market we first covered Gold two weeks ago. Firstly, the interest rates market had a sizeable correction, with the 10Y-2Y yield now trading at close to -0.45% instead of the -1% range just 3 weeks ago....
Last week we mentioned that #yields cratering like they did was not normal. Currently they are all at support with $TNX holding better than short term yields. The 10Yr has BOUNCED a bit off support. In a positive note it does lessens the inverted Yield curve :D We'll see how this scenario holds. What's happening today is more SPECULATION than anything else. The...
2 year, 5 year, 10 year and 30 year yield are all showing a similar characteristic: · Low established in 2020 · Major support trend started forming since then · Seem to have completed its retracement with a double-bottom · Resuming on its major support trend · Target to break above its recent all-time high set on Oct...
Since the start of January, most leading macro markets have experienced a reversal around their 38.2% Fibonacci retracement levels. However, BTC has shown resilience and fought the cross-asset sell-off. This divergence is likely driven by the fact that there has been over $1 trillion in net liquidity added to the market since the bottom in October, primarily...
What is moving this week? Our weekly eyeball into the different markets. Interest rates likely to be breaking its all time high again, get ready for another volatile month ahead. Difference between yield and interest rate: Borrowers take reference from interest rates and lenders take reference on the yield. Interest rates and yield moves in tandem. Minimum...
Rate hike will continue as Jerome has no way out now. 50 basis points is my projection. Experts cannot see any concrete signs that economy is under control, in which they are right. Wall St banker's narrative are switching from soft landing, to crash landing. US money supply has shrinked while yield curve remain heavily inverted. Uh ohh. Congress voted to end...
The chart above is a yearly chart of the ratio of the 10-year Treasury yield (US10Y) to the 2-year Treasury yield (US02Y). The chart is meant to highlight how extreme the yield curve inversion is getting. Typically a yield curve inversion is indicative of an impending recession. Usually, the 10-year treasury should have a higher yield than the 2-year treasury...
Inflation is plateauing and likely to end flat in 2023, so what will that impact the markets? Though inflation peaked at 9% last year and has been declining to 6.4%, CPI seems to be plateauing and may close flat in 2023, but this is not good news at all. Why? Because the Fed wanted to see the CPI or inflation coming down to 2% in a sustained manner. Studying...