An Ugly Win

With SPX up 2.6% on the month, May qualifies as a win (assuming it holds 2648).  But, it was an ugly win.  Stock buybacks, ramp jobs in oil and gas, timely reversals in USDJPY and VIX — everything but the kitchen sink went into the mix to turn in a positive performance. While a more … continue reading →

Is it Safe?

One of my favorite big-picture indicators is the spread between 10-year and 2-year yields.  Members have seen this chart many times.  It shows that previous sharp expansions of the spread — not the state of being inverted — signaled the coming equity crashes.Looking at the components separately, we can see exactly what happens when the … continue reading →

Oil & Gas: The Payoff

For months, I’ve been pounding the table on oil and gas being overpriced.  Algos have relied heavily on rising oil and gas prices to keep stocks from melting down again.  Central banks, however, could not keep interest rates under control as long as inflation was being driven higher by rising oil and gas prices. A … continue reading →

Let’s Not and Say We Did

When the Fed says they’re not particularly concerned about inflation… it’s not because they’re not concerned.  It’s simply that they know the economy cannot function with higher interest rates — not with the level of debt sitting on personal, corporate and government balance sheets. They recently started slipping in the word “symmetric” to describe their … continue reading →

Once More, With Feeling

While SPX has pushed above its 2.24 Fib extension multiple time over the past two months, and has remained safely above the critical support for the past seven sessions.  ES, on the other hand, has really struggled.  Following a failed rally on Mar 21, ES didn’t even tag its (2728.79) again until May 11.  Since … continue reading →

Bonds and Value

As the 10-year pushes past 3%, we’re left to wonder whether flows will begin to favor bonds again.  In a world of 2.5% inflation, bonds might seem like a sucker’s bet.  In a world of 8-10% inflation, even more so.Yet, we often buy instruments with little long-term value but plenty of short- or medium-term appreciation … continue reading →