Don't Forget About the 2s10s

While VIX’s 31% collapse in the past week… …has, as expected, fueled an impressive rebound……we shouldn’t forget about the 2s10s. The 10Y retreated from our upside target on cue. But, the 2Y has been gradually rolling over.

As long as the 2s10s inversion persists, the year end rally should be safe. But, history shows us that when it unwinds things can get ugly in a hurry.