My risk window system does not show any clear risk windows for this coming week. There is a sort of a risk hot spot near the front of the week, say late Monday, early Tuesday and another one late Thursday and early Friday, but the risk sum values in these windows are not that well defined. I'm not quite sure what to make of it. Maybe a whipsaw week. The dispersion in the data has been increasing lately, and I'm probably going to be forced to rejigger the whole cotton-picking system to tighten it up a bit.
Last week the Monday risk window caught a short term double top. The Thursday risk window caught the 900 point short squeeze rally acceleration that occurred when short traders suddenly realized that the double top couldn't send prices to new lows, but missed the actual low on Wednesday. Soo OK, but not great.
It doesn't take a genius to figure out what's going to happen when you restrict the supply of something just as demand is kicking into high gear. Crude has been on fire, figuratively speaking, breaking a thirteen year trend line early this year and a fifteen year interior trend line just this past month. Expect Energy Secretaries, OPEC talking heads, etc. to come out in mass to try to stop this run. If all they offer is hot air and no substantive action on supply, it should light the afterburners on the current zooming inflation jet.
The 2 year Treasury note below, currently yielding roughly a real -5% if you are clueless enough to believe the BLS inflation numbers, makes no sense. Without massive FED intervention, the current rounding top in the 2 year note should take the elevator down to the lower trend line post haste if even that can stop the fall.
Regards,
Douglas
Edited by Douglas, 16 October 2021 - 07:39 AM.
