Stocks Surge To 'Most Overbought' In 58 Years As Yield Curve Collapse Continues

The bond market's message to stocks...

 

The S&P 500 is up for 13 straight months (including a "perfect year" of 12 monthly positive returns - which has never happened before) and just reached its most overbought level since 1959...

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At least Santa delivered a little gain for stock investors today...

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(and the same desperate late day ramp as yesterday)

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For the 4th day in a row, Nasdaq was smacked lower around the open...

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Notably as AAPL has suffered so it appears traders are rotating into FANGs...

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NOTE - Small Caps just can't catch a bid in December as Trannies soar...

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And while stocks are soaring, breaking records never seen in the history of stocktopia, the US Treasury yield curve is screaming weakness and looming recession...

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UST 5s30s dropped to 51bps today - the lowest since 2007!

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Meanwhile Dollar liquidity is now at its highest since June 2015... looks like those Japanese banks found a source of funding mysteriously overnight...

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The Dollar Index slipped lower once again to 3 week lows...

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And while President Trump's approval rating has bounced back like a tech stock's dip, the lagged correlation suggestion the dollar weakness may extend through the new year...

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Commodities have been on a run since Yellen hiked rates...

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WTI rallied back up towards $60 as RBOB faded after DOE data today...

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Gold gained once again - nearing the $1300 Maginot Line...

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Gold and Bitcoin continue to unwind early December's chaos...

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Cryptocurrencies were volatile today with South Korean headlines slamming them overnight, a rebound, then weakness again late on amid the possible Bitcoin2x fork... also notable once again a rotation from BTC, ETH, and LTC into XRP...

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And finally, copper is up for the 16th day in a row... highest since Jan 2014...

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Comments

Spectre Dec 28, 2017 4:48 PM Permalink

When the Bond market finally implodes it will come with such power and devastation that all other markets will crash hard.  Beware fools !

bobert727 Dec 28, 2017 5:36 PM Permalink

Only twice in the last 35 years has the Dow had this small of a daily range, on a percentage basis (.169). The last time was 12/30/2013. It was followed by an ugly January 2014, losing just over 7%. 

As of today's close, this will be the smallest weekly range percentage-wise (.526%) for the DOW since the start of my weekly data; 1969!

Small ranges generally suggest a trend change in the future.

Time will tell, but I suspect this is on the horizon.

Jungle Jim Dec 28, 2017 5:51 PM Permalink

I don't have any stocks or Bitcoin. I just want to know what's going to happen with gold. It got close to $1300 today. But that usually means the monkeys are getting out their hammers.

innertrader Dec 28, 2017 6:14 PM Permalink

Don't have a clue about the S&P 500!  However, today I ate at the exact same place I ate at as a kid, 55 years ago.  Then, I could purchase 6 hamburgers for $1.00 and $1.00 per hour is what I got paid.  At that time no one have ever heard of "minimum wage" laws.   Today the same 6 hamburgers cost $24.00 and I'm sure 14 year old kids get paid minimum wage, which is a LOT less than $24.00!  Therefore, are we better off with "minimum wage" or without it?  Are we better off with Illegal Aliens or without them?  The lies the American people fall for is almost funny!!!   

Fufi007 Dec 28, 2017 9:15 PM Permalink

After earning season Jan-thru-Feb ends, buy in the money PUTS, 3 months out on SPY, SPX and any other stock, leverage ETF you think will get a hit during the forthcoming correction. I anticipate one around 10 to 25% if not more.

Buy in the money CALLs in the VIX same terms and on any leveraged inverse ETFs just in case.

Sell Credit spreads (Calls or Puts) too. Better hedge potential losses than sorry.