Last week, we kept a close eye on the EURUSD, wondering whether it could push past its SMA200 after taking such a long time to even reach it.  This morning, that question is settled.  EURUSD broke out……which means that DXY has finally broken down.This says a lot about the bond market — which continues to sound alarms about the stock market.

But, so far, the end of quarter goal-seeking is ruling the roost — meaning we could easily get another bounce in TNX as we saw near the end (yellow arrow) of Q1.

continued for members…USDJPY, for instance, is bouncing for no particular reason.Even though our yield curve model suggests a continuing widening of the 2s10s.  More on this below…The equity picture:

Oil is either done or close to done backtesting… …while, RB slightly overshot.continuing on the yield curve model…

Lately, I’ve been focused on the last year or two. Note that 2s10s has busted out of the rising white channel as well as the falling red TL. But, I’ve also been working on the big picture and how reliable the model has been in forecasting equity results.  Note that both breakouts above the red trend lines and breakdowns below the yellow trend lines have been bearish for stocks.The large declines we saw in equities this past year corresponded to (1) a breakdown in the large yellow TL and (2) a bounce that began at the dashed purple internal TL (from 2011) and threatened to break back above the white TL which connected the 2000 and 2006 lows.

At this time, the 2s10s is threatening to break out above the red TL connecting the 2013 and 2016/7 highs.  This would be very bearish.  If it does, equities should drop fairly soon.  But, a breakout is not a sure thing.  Note that a line drawn parallel to the red TL constructs a channel which could guide the 2s10 to new lows and even to inverted.We have to wonder whether the Fed, given the choice between a major decline in equities or a strong signal regarding a coming recession might seek to reverse things right here — meaning a faster decline in the 10Y or by somehow propping up the 2Y.  I’ll be working on these charts over the next couple of days, as I believe they are critical to the overall markets.

Along these lines, I’m going to take the rest of today and tomorrow off and get caught up on these and other big picture charts.  I’ll post at the end of the day if anything major happens.

GLTA.