This chart shows a view of the top 8 banks in the United States and the charts go back to at least 2008 so you may see how artificial the bubble is. As the Federal Reserve continues its interest rate hikes, a cloud of uncertainty looms over the banking sector. This trading strategy anticipates potential instabilities in major banks, which could catalyze a...
DXY daily guidance is cautiously bullish. Recommended ratio: 90% DXY, 10% Cash. *Equity Futures, Agriculture, Metals and EURUSD are down to start the week while DXY, US Treasuries, Energy and Crypto are up. As long as the Federal Reserve's federal funds rate keeps going up and Russia keeps escalating the war in Ukraine, DXY will likely keep going up. Key...
This post is intended to show the current gap between the market for the 2 year US treasury yield on bonds and the official funds rate, and why the market is forcing central banks hands into raising interest rates when the market is in such a fragile state in ability to support and maintain debt at heighten interest rate levels. Simply put, bond market are...
Quick update on the Cycle Bottom Indicator (CBI) tracking + Log Chart post central bank federal funds rate announcement with a 75 basis point increase. See link for announcement: www.wsj.com This was not too much of a surprise, given: 1) inflation numbers after a 2) massive increase in M1 currency supply post COVID (in all tear 1 currencies) and 3) the...
The last three major crashes and recessions have been preceded by a period of interest rate hikes by the Fed. Each hike since the 1970s has gotten less and less far before the economy rolled over, calling for an emergency rate cut. There are many reasons for this, including the deflationary impact of demographics and globalisation, as well as the ever increasing...
Currently the Federal Funds Rate is at 0 %. The Yield Curve is close to flat around 0.5 %. Inflation is at 7.5 %. IF the FED raises the Federal Funds Rate 0.5 % then the Yield Curve will go negative and start a recession. The FED cannot stop the current inflation without the yield curve going negative creating a major recession. This means that stagflation is...
A brief explanation on why everybody is and always has been so wrong about the deficit, printing and much more...
When it comes to charting and technical analysis in the modern era I think this might be one of the most important charts of all time. There is a decades long falling wedge structure that quite frankly began before I was born. Falling Wedges are normally very unreliable in reaching target but the longer term they are the more likely they are to make it to...
Background On May 1 Bitcoin had shot up to the 1.618 extension of XA and stalled there for a while and I posted my first log butterfly idea, which will be in the lined idea below. I was one of the first and few people warning that this price action was at a major target and we should be expecting a retrace. As part of my disaster scenario and personal...
Background For years I have been fascinated by the Dollar Milkshake Theory of Brent Johnson out of Santiago Capital. In the broadest strokes, there will be increased dollar demand as the fiat system collapses because all the other fiats will collapse and then the Dollar will be the last fiat standing before the fiat system is replaced (somehow). This leads to...
Check out my DXY chart from November. DXY fell from 99, just under 100, all the way down to 95/94 in ~2 weeks. High correlation with the Fed cutting rates and yields falling. With the twin deficits set to GROW not shrink and the Fed's balance sheet set to GROW not shrink, and with interest rates set to FALL not rise, the path for the US dollar is looking more and...
Take notice how correlated the lending rate is to the rate of fiat dollars printed. All that money was printed at 0% interest. Now, rates are going up and the printing presses are cooling down.
September 2008 - The Fed started printing fiat in overdrive soon before the bank bailout of early 2009. Bitcoin's first block was also mined at the news of this in January 3-9th 2009. However monetary base has been in decline, retracing. What does this mean for the derivatives market and the Repos?
Just for fun and something to watch. Recessions in Grey
LIBOR OIS SPREAD ED SEP 2020 - FF OCT 2020
Simple chart showing the federal funds rates since 1955. As you can see the rate is currently in a falling wedge pattern which should eventually break to the upside. However given the conditions of the global economy, for now, we may very well be at the peak at the top of the channel with a downward move pending. If this happens to be the peak and feds continue...
GLD, SPYDR Gold Shares ETF backed by the physical commodity, has increased dramatically following the dovish Fed sentiment out of yesterday's June FOMC meeting. Central banks worldwide have begun to indicate that they are willing to begin cutting rates, or to resume Quantitative Easing (QE) and balance sheet expansion. As Chairman Powell shifted away from the...
After hitting our first TP on Friday (1.126) the pair is back trading inside the triangle after it it has recovered from the bearish breakout which didn't last long and therefore lost its significance. The main reasons behind this large recovery are : 1- Markets expecting the Fed to deliver a dovish statement on its last meeting in 2018. 2- EU and Italy reaching...