Between an FOMC meeting, consumer confidence, GDP, durable goods, PCE, consumer sentiment, new home sales and a slew of important earnings calls, this week promises to be one of the most important so far in 2022.
Somewhere in all that data we should learn whether the economy is really in a recession (spoiler alert: it is.) The market’s response could be both fast and furious.
Futures are up modestly but fading as we approach the open.
continued for members…
Note that USDJPY is close to breaking down and EURUSD is close to reversing – neither of which would be positive for stocks.
CL and RB are both resting on their SMA200s…
The 2s10s inversion has increased. We’ve discussed before how a sharp rise in the 2s10s typically coincides with market crashes. This could happen with a steep rise in the 10Y while the 2Y remains steady. 
But, the more common and much more dangerous case is a sharp drop in the 2Y from elevated levels where it’s equal to or higher than (an inversion) the 10Y. This is typically the result of a financial shock where money flows out of stocks and into short-term fixed income instruments like 2Y notes. It is
It’s safe to say it’s a chicken and egg situation. But, it makes sense to look for signs of the 2Y rolling over – such as the chart below.
Will XLK’s H&S Pattern finally play out? Note that XLK is over 40% MSFT and AAPL.
Stay tuned…