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Inversion BEAR wakes up.....after 12 years


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#1 dTraderB

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Posted 14 August 2019 - 06:44 AM

This has been my busiest morning for a long while, since those wildly bullish weeks in January. 

 

Everyone seems excited about the yield curve inversion.  More reason for the FED to come in, and they will. BE VERY ALERT for more wild sings and reversals. 

 

zerohedge @zerohedge
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Recession Countdown Begins: UST 2s10s Yield Curve Inverts For First Time In 12 Years

 

 
 

"Actually we're reading the spread wrong," Larry Kudlow says of the flattening yield curve. "There's no recession in sight right now." #DeliveringAlpha https://cnb.cx/2zOaKgh

 

 



#2 dTraderB

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Posted 14 August 2019 - 06:46 AM

from ZH

While many have noted the inversion of the 3m-10Y segment of the US Treasury curve, mainstream investors appear more focused on the spread between 2Y and 10Y yields... and that has just inverted for the first time since May 2007.

The spread between 3m and 10Y yields has been inverted since mid-May and reached its most inverted since April 2007 this morning...

bfm82FA.jpg

Source: Bloomberg

 

But now, the 2Y-10Y spread ha collapsed into inversion...

bfm212E.jpg

source: Bloomberg

For the first time since May 2007...

bfmA04F.jpg

All major segments of the curve are now inverted

2019-08-14_0.png

source: Bloomberg

With 30Y below the EFF...

2019-08-14%20%282%29.png

source: Bloomberg

And 30Y at record low yield at 2.05%, down 10bps overnight...

bfm1656.jpg

source: Bloomberg

The strongest recessionary signal yet, and equity markets appear to be waking up what this all means...

bfmCB47.jpg

Source: Bloomberg

https://www.zerohedg...t-time-12-years



#3 dTraderB

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Posted 14 August 2019 - 06:47 AM

Note markets do not normally crash immediately after a yield inversion:

 

John MelloyVerified account @JohnMelloy
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-A recession occurs, on average, 22 months following a 2-10 inversion. -The S&P 500 is up, on average, 12% one year after a 2-10 inversion. -It's not until about 18 months after an inversion when the stock market usually turns and posts negative returns. (Credit Suisse data)

4:02 AM - 14 Aug 2019


#4 dTraderB

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Posted 14 August 2019 - 06:48 AM

only 1/2 position (4 lots) on this current NQ short  with very tight stops



#5 dTraderB

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Posted 14 August 2019 - 06:54 AM

closing 2 lots, tight stop on remaining 2

 

ES now down 50 points from yesterday's high



#6 dTraderB

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Posted 14 August 2019 - 07:24 AM

No More Vega @VolatilityWiz
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Ugly over there:

EB7bdzMX4AAPwqa.png
4:54 AM - 14 Aug 2019


#7 dTraderB

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Posted 14 August 2019 - 07:26 AM

Pat Hennessy, CMT @pat_hennessy
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$VIX and $VX futs have struggled to steepen beyond its current levels since end of July. Watch VX1-VIX and VX2-VX1 spreads for confirmation on any move higher in $ES. Price action in VIX space looks similar to last Thursday (although ES a bit lower here)

EB4TfC1UcAANfSX.jpg
2:20 PM - 13 Aug 2019


#8 dTraderB

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Posted 14 August 2019 - 07:29 AM

Carl QuintanillaVerified account @carlquintanilla
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BAML: “For the ten [2/10] inversions back to 1956, the S&P 500 topped out within approximately three months of the inversion six times (1956, 1959, 1965, 1973, 1980, and 2000). The S&P 500 took 11 to 22 months to peak after the other four inversions (1967, 1978, 1989, and 2005)

4:11 AM - 14 Aug 2019


#9 dTraderB

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Posted 14 August 2019 - 07:31 AM

Sven HenrichVerified account @NorthmanTrader
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We've never faced a recession with so much debt and so little Fed ammunition available and with negative rates still in effect in many places There's no playbook for this. Historic data will be of little use.

4:45 AM - 14 Aug 2019


#10 dTraderB

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Posted 14 August 2019 - 07:37 AM

Reminds of the final few weeks of the DOT COM mania, and also the 2007/2008 boom.....

 

but there are possible new highs in September 2019 and then the big decline begins

 

zerohedge @zerohedge
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This is insane

EB7hfHoXUAUJheG.jpg
5:20 AM - 14 Aug 2019