arama-nuggetrouble

arama-nuggetrouble Updated 

US10Y is at support. With an expected terminal rate of 5.25%, the US10Y will not fall below the neutral rate (3.0%-3.5%). The fed has messaged that the September meeting was them getting to neutral (3.25) and the November meeting as entering restrictive territory (4.0). I see a higher upside risk than downside for bond yields. VIX is at 19 and SKEW,VVIX are...

arama-nuggetrouble

Markets are pricing in a recession by 2023 year end. Many believe the fed has overtightened and financial conditions will kill growth. Less spending, lowering earnings and less jobs. In today's market environment an environment a recession is actually bullish for equity markets. A recession would bring down aggregate demand and inflation. This would allow the fed...

arama-nuggetrouble Updated 

The problem with having a strong support zone, is that when that support zone is lost. Stops are run and the sell off is accentuated. Eventhough, there is certainly a bullish case to be made for risk assets. Why take the risk? It may best to look at other non-related sectors to hid out in. Look at the strength in XLP...... XLY/XLP (Discretionary/Staples) ...

arama-nuggetrouble

Bitcoin has held up comparatively well against its pre-covid levels. Prior to COVID, BTC was at ~10K. After a huge market sell off BTC stands slouched at 20K, up 100% still! This leads to the question of should you buy or not? I don't believe the current economic landscape provides the evidence needed to support a crypto bull market inception but, I certainly...

arama-nuggetrouble Updated 

Risk assets such as, Bitcoin/Crypto, Tesla, QQQ, GDX, TIPS, EEM, etc.. all profit when real interest rates decline . Persistently high Inflation expectations will slow the rise in Real Rates potentially bringing price stability to risk assets. A bullish rally could be brewing when are you buying?? Real Interest Rates: Nominal Rates - Inflation Rate...

arama-nuggetrouble Updated 

SPY is down over 20% and the VIX is at ~27!! Extremely low in relation to current market conditions. Based on the Fed’s recent economic projection , unemployment is set to rise 0.6% in 2023!!! In turn a drop of PCE inflation from 5.4% to 2.8% is projected. Implicating a US recession and a possible global recession. Pivoting Powell is donning the Volker mask and...

arama-nuggetrouble Updated 

Here we have the Yield Curve: Treasuries are shown from lowest duration (US03MY) to highest duration (US30Y). Normally, the lowest duration treasuries yield the least (least) and the highest duration treasuries yield the most (riskiest). However, now the 3-Year Treasury yields more than the 5 year, 10 year and 30 year. The Fed has decided on a hard landing and...

arama-nuggetrouble Updated 

BTC is at a great buy zone if you are bullish. But, the problem is that it is a free fall below that level. 12500 seems like the obvious price target if BTC were to fall. Possible support at 20000. Real Interest Rates have been the forward looking indicator for all risk-on assets especially BTC. As Real Interest Rates rise, it becomes A LOT less attractive for...

arama-nuggetrouble

Things will get ugly if SPY goes below 400. Watch for the Dollar to break upwards from the rectangle pattern that started in 2015. Be careful.....liquidity events don't adhere to TA...

arama-nuggetrouble Updated 

Inflation is mainly an Energy issue but, conditions are so stimulative/inflationary.That inflation has broadened out. Inflation for the past weeks/months has only been about food/energy but, the fed thinks that Core Inflation also needs to be controlled. The Housing market and the Labor market signify a "roaring" economy.... A big labor force with good wages WILL...

arama-nuggetrouble

Gold follows real interest rates,,,,,it's the simplest correlation in the books..... The Orange Line is Gold-Inverse. The Chart shows: US10Y (10YearYield US Treasury) - T10YIE (Ten Year Inflation expectation) = Real Rate If you are bullish on Gold real rates need to retreat. If you are bearish on Gold real rates need to soar. X.x nuggetrouble........

arama-nuggetrouble Updated 

Real Rates have served as a forward looking indicator for Tech and Commodities..... This post at its core is a reminder that: As inflation expectations fall: real rates move higher. A high inflation expectation leads real rates to move lower allowing markets to rise. Read that again. A high inflation expectation leads real rates to move lower allowing markets to...

arama-nuggetrouble Updated 

Distribution or Accumulation? - Is WallStreet Manufacturing an Exit or Hoarding for the Long Term? Exciting, impulsive market moves are followed by frustrating, distributive markets. Boring markets are then followed by exciting markets!! This is how charts move. Impulsive and corrective moves represent buyer sentiment. Corrections in the opposite direction of...

arama-nuggetrouble

Yes, I believe so. The collapse of the Russian economy will hit Europe and Asia a lot harder than the United States. It's hard for the ECB's hawkishness to be taken seriously when Europe can't even get their hands on natural gas, oil or corn. The US is coming off the backs of very accommodative stimulus and Americans consumers are ready to spend. American...

arama-nuggetrouble Updated 

Mosaic is the largest U.S. producer of potash and phosphate fertilizer. I remain bullish but, short term downside can be looming ahead. Fundamentally, it is poised to profit. The world's population is developing rapidly. As, third world countries transition to a "modern" way of living so will their consumption habits. Expect them to eat a lot better food and a...

arama-nuggetrouble Updated 

Real Interest Rates move inversely of Gold. Gold's next move will be dependent on a continually decreasing Real Interest Rate. From 2000 to 2011, Gold increased from $260 to $1900. In 2000, Real Rates were roughly at 5%. In 2011, Real Rates were at -1.7%. A significant drop in Real Rates contributed to Gold's price appreciation. From 2015 to 2020, Real Rates...

arama-nuggetrouble

Investors preference between XLP and QQQ is important to pay attention to as it shows the trade-off of "risk off equities" (XLP) versus "Risk on equities" (QQQ). The last time XLP was at these levels relative to Tech was in 1999! The chart above shows XLP/QQQ. As you can see, XLP outperforms heavily during larger degree market corrections. Since December 2021...

arama-nuggetrouble Updated 

TA: QQQ is at a key support level right now. Bears can break Tech's upward channel; this will see QQQ go down to 274. However, Bulls are at a key 50% retracement area and still resides in a bullish channel. Fundamental: The last time the Fed began raising rates and reducing the balance sheet, equity markets continued moving up after, some initial fear. The fed...