Time To Think About Rates
Higher for longer
US 10 year bounced perfectly on the big trend line, and is now reaching the short term negative trend line. This last move higher has taken most by surprise. Note we are above all major moving averages as of today...
Source: Refinitiv
That inflation connection
US 10 year breakevens squeezing hard...
Source: Refinitiv
Rates and oil
The perfect "connection" stays in place...
Source: Refinitiv
Not all stress is moving lower
Bond volatility, MOVE index, is squeezing hard. The short term gap between rates and equity volatility is once again very wide.
Source: Refinitiv
JPY perfection
The perfect trend channel stays intact for now...
Source: Refinitiv
The long long
Non dealers are running a massive SPX long.
Source: GS
The Tesla melt up
On June 26 (here), we outlined the short term bullish Tesla logic (credit to MS and GS). The stock has squeezed aggressively since then. The big negative trend line comes in around these levels, but note we are trading above the 200 day for the first time a while, as well as the fact we could be seeing the 50 day cross the 100 day.
Source: Refinitiv
Bitcoin's range mania
Bitcoin is the king of mean reversion trading. You buy range lows, and sell range highs. We pointed out the set up in late June (here). Note the big trend line comes in right at range lows, and the 200 day is slightly lower.
Source: Refinitiv
1st percentile
Realized correlation is approaching 5 year lows and SPX 10-day realized volatility is sitting at a 5-handle, the 1st-percentile over the last 3 years.
Source: GS
Pandemic savings have dried up
Unlike in 2022, US households no longer hold significant excess savings.
Source: BCA
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