What a week
The 10 year hitting the 50 day
The US 10 year is breaking well below the short term trend line, hitting the 50 day right here. There is a small support here, but the bigger support is down around 4.3%. Note that the 200 day remains way lower, down around 3.95%.
Source: Refinitiv
If we actually have a real reversal in bonds...
If we do have a year-end rally in bonds...here are the subsectors that have sold off the most since August when 10yr yields began their rapid increase.
Source: MS thematic strategies
If we actually have a real reversal in bonds...(II)
Here are the subsectors that gained the most since August when 10yr yields began their rapid increase. Actually only 2 with positive performance...
Source: MS thematic
Russell - king of mean reversion
Trading mean reversion is often very painful, especially at turning points, as you end up buying the most brutal selling, and end up shorting the most intense buying. Russell continues to be the king of range trading....bouncing violently once again.
Source: Refinitiv
The power of inverse fear
The moves lower in the VIX and the VVIX have been much more powerful than the initial war related pick up in fear. We are approaching levels where vols are becoming attractive again, both from a hedging point of view, as well as using vols for replacement strategies.
Source: Refinitiv
That was quick
From very oversold to most overbought in a while...but still far from very overbought levels.
Source: Refinitiv
The ouch chart
Systematics front ran a move lower in equities...but markets decided to do the opposite. Pain is huge for systematic kings.
Source: Tier1Alpha
In tech we (must) trust
Tech vs SPX at "elevated" levels. Recall what Howard Marks just pointed out: "10 stocks make up nearly 35% of the S&P 500. These 10 stocks are responsible for 100% of year-to-date returns."
Source: BofA
Policy panic
Friday Hartnett poetry: "So much anger, so much hate, yet unemployment so low; can you imagine the social disorder if unemployment hits 5%; that’s why policy panic comes early in ‘24".
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