Food for Thought

There’s some good research on this morning that illustrates the fact that no interest rate inversion (10s1s) in the past 70 years occurred without a subsequent recession. The average lag was about 14 months, meaning that we’re now officially overdue. Furthermore, none of the post-inversion equity rallies lasted. Every single one was completely reversed, … continue reading →

Powell Back in the Spotlight

It’s been lonely maintaining that rates would continue to rise over the past 10 months. As we noted in Decision Time: “TNX…looks likely to test 47.55 after it digests recent gains.” After the 10Y topped its Oct 21 highs, folks started coming around. Now it’s looking fairly obvious.The only question is whether Powell will fess … continue reading →

VIX: Decision Time

VIX’s constant slide has been one of the best indicators of the runaway bullishness over the past 10 months. Over the past week, however, it has soared to new highs, reaching our 200-day moving average target well ahead of schedule. What does it portend for equities? continued for members… … continue reading →

Forcing Their Hand

The recent breakout in oil/gas prices has now inspired a breakout in the 10Y. It’s an important headwind for the Fed, which had relied on falling energy prices to keep inflation and interest rates at an acceptable level. continued for members… … continue reading →

Inflation Not Done

We might be done with inflation, but judging by the oil/gas markets, it’s not done with us. Both CL and RB have now broken out of channels dating back to early 2022 – with CL pushing above its 200-day moving average this morning. The Fed has its work cut out for it this week – … continue reading →

No Surprise

“I can’t believe stocks rallied so strongly into options expiration!” said no one. Between VIX’s plunge, the euro’s ramp, and the yield curve’s decimation, bears have had no chance – even as fundamentals argued otherwise. continued for members… … continue reading →

End of the Line?

The market has frustrated both bulls and bears lately, vacillating between sharp downturns and even sharper recoveries. But, a close examination of the charts shows two very obvious patterns that suggest the tide is about to turn – not in a good way. continued for members… … continue reading →

Price Setting

After establishing a well-formed falling channel and positioning for a bearish 10/20 cross, SPX soared last week on  – what else? – another collapse in VIX. In the process, the 10/20 cross was (at least) delayed and the channel busted.  It’s normal activity for the lead up to a Fed meeting. Perhaps “price discovery” should … continue reading →