Last week in the blog we talked about the inverted yield curve and what we look for when we see it so that it gives us context and meaning and so it doesn’t just end up being another layer of fundamental data that we see but don’t know how to process.
To sum up last weeks blog, we need to pay attention to when the shorter term bond rate gets a higher yield than a longer term bond as this is not a normal condition. We saw that occur a couple of weeks ago. That is a sign that perhaps the economic situation is changing and we can use this to give ourselves a heads up to start paying closer attention to other metrics in our technical analysis and that would be moving average crossovers and specific bearish type setups like double tops and “M” for murder patterns. We would be looking for these things in the major indices to give a heads up that the equity markets also might be ready to turn as well.
So I have put a little video together to give the visual of the concept we have been discussing, I am hopeful that this ties this concept together.
Trade Well All,