Thread: tsptalk's Market Talk

New highs for the dollar to start the day. Yields are up, oil is flat, and stocks are not happy.

The CPI came in hotter than expected again. Looking back at the June reaction to the CPI, stocks bottomed about a week after it was released.

The 2/10 year yield curve is now -0.13. That's now the most it has been inverted since the financial crisis.

The close is key, but the early intraday action shows a breakdown in the bear flags on the C and S funds, while the I-fund is flirting with new lows.

Hmm trying to understand what the 2/10 means when it crosses 0.0

It means shorter term bonds (2-year) are paying more than the longer term (10-year), which is an odd situation and generally means there is something wrong with the economy. Historically it has preceded a recessions by several months to up to 2 years.

We had the inversions in 2006, 2007, a year before the financial crisis was apparent. Then again in October 2019 before the 2020 Covid crash / recession.

Here it is again, leading to... something.



Hope that makes sense.

Originally Posted by tsptalk

The 2/10 year yield curve is now -0.13. That's now the most it has been inverted since the financial crisis.

Thank you for great analysis Tom! Very interesting charts.

JP Morgan earnings and a stronger than expected PPI report are setting the tone this morning.

JPM has been forming a slanted head and shoulders pattern before today's 4% breakdown.



The dollar is making more new highs. Why the dollar is strong and metals are weak in this inflationary environment has been interesting. Gold has been a hedge against inflation forever.

This is options expiration week so the action can't always be trusted. That doesn't tell us much because we don't know if that means we can't trust the selling, or this afternoon's rebound.

Seasonality-wise, the week after expiration week is a little more bearish than pre-expiration, but earnings may influence that this month.

The market seemed like it was ready for an excuse to rally and the retail sales report and some solid earnings reported by Citigroup may have done the trick as we see the indices flying this morning.

Lots of headwinds but we had some very dreary data recently yet the indices did not make new lows, so something was building.

This is a bear market however, and rallies may not last long with resistance all over the charts.

NYSE volume 6 to 1 advancers over decliners with 45 minutes left.

Nasdaq volume is about 2.5 to 1 Adv over Dec.

Originally Posted by tsptalk

NYSE volume 6 to 1 advancers over decliners with 45 minutes left.

Nasdaq volume is about 2.5 to 1 Adv over Dec.

Advancers won.