We’ve been accurately forecasting USDJPY for over 12 years, starting with recognition of a falling wedge that yielded a huge breakout in 2011 [see: USDJPY – How Low Can it Go?] and evolving to an understanding of the importance of the Yen Carry Trade. The Japanese economy is a hot mess, but the chart patterns … continue reading →
Tag Archives: treasuries
We’re starting to see cracks in the equities and bond markets related to the debt ceiling. Interest rates are ratcheting higher. And, although OPEX-related maneuvers are working to prop up stocks, we had a momentary breakdown in SPX yesterday. Utilities, a bond proxy for some, have taken a big hit this week as investors shift … continue reading →
For months we’ve been warning about the coming inflation problem, wondering when the bond market would notice and/or care. The immediate problem in a nutshell: One of the most highly correlated components of CPI with the headline rate is the price of energy, and gasoline in particular. If prices were to remain where they are … continue reading →
One of my favorite market indicators is our yield curve model. It has warned us several times in advance of significant correctionsthis year. Warnings over the past few years have included: July 16, 2018: The Yield Curve Update – We were a little early. SPX closed at 2798 that day, rose to 2940 before crashing … continue reading →
We’ve been bearish on oil for quite a while, shorting it at 75.57 on October 3, 2018 after Jamal Khashoggi was dismembered and at each of the 3 subsequent peaks since then: just before the JCPOA breakup, the Abqaiq attack and the Aramco IPO — which should have been a peak, but resulted in a … continue reading →
I called a top in SPX on May 20, 2015 [see: The Last Big Butterfly] because it was about to reach the 1.618 Fib extension at 2138 — our upside target from way back in 2012. SPX peaked the following day and fell over 300 points before it was all over. What I didn’t notice … continue reading →
The 10Y yield has clearly broken trend as expected, with a couple of Fib tests the only things standing between it and our downside targets. Our 28.56 upside target from Jan 10 [see: China – It’s Not Me, It’s You] has officially yielded. This is what stocks were waiting for — a sign that interest … continue reading →
A sharp drop in interest rates has traditionally been a negative for stocks. The chart below shows that most significant declines in 10-year yields over the years were associated with steep drops in the S&P 500. Usually, equity losses precipitated the drops in yield. As stock declines accelerate, money flows into bonds — raising prices … continue reading →
If rates really are heading back up in the near future, we’d expect to see bonds take a hit (and stocks, too, but that’s a different post.) Back on Jan 21, we focused on the 10-year treasury (ZN.) We observed that ZN had just completed a large Crab Pattern and broken down from a rising … continue reading →