Friday's Reversal and a Slew of Technical Charts

Let’s just start right off with Friday’s settlements which will show how an absolute drubbing on Thursday was somewhat reversed on Friday in the Treasuries, but the Equities saw even bigger swings to the upside. We also wanted to correct the Roll in Gold from August to December, we had the price correct but the net change was off so we are showing both Thursdays settles and Fridays:

As far as the US Treasury Curve not a big move by any means but the 5Y was the weakest link on the board:

Our GFBP gave back the great move on Thursday and maybe the entire book should have gone flat on Thursday, however Friday’s move is one day and would need to see a bit of continuation before liquidating anything further, We added an additional Nasdaq put.

As far as the MEGA8s, they had a great day and we rolled the call option to next week:

Here is the MEGA8 market cap chart:

We often here how we haven’t seen a recession, that yield curves are wrong and that the FOMC now thinks we can avoid any such sort of soft or hard landing. Well we present this next chart from @gunjanJS on Twitter and DBank which clearly shows the average is just over 2 years and The FRB started hiking rates in March of 2022 so we are just over 16 months…to say that 2024 is starting to look interesting is well, an understatement:

Ok to the technical charts, first up the US Bond Futures where it tested 123-05 for the 3rd time and we would suspect longs to set stops below here, maybe we need a flush, but possible we consolidate around this level for now:

Next up the DOW we still feel this is a formidable double top and until we close above 35825 we will not be convinced otherwise:

As far as the SP500 it is well above the 4528 Key marker and seems to be poised to continue to perform well but confliction with the Dow here means either the Dow needs to breakout and confirm this or we consolidate and sell off with the Dow weakness, will see:

Crude Oil is on a decent run and no, it won’t effect the inflation numbers, its a small input and Oil would have to double in price to have a real effect, but its strength here is curious:

Crude Oil has also prompted the GFBP to reverse its spread trade in favor of this breakout, here is the RBOB/CRUDE spread we look at:

Quite a run in RBOB so we are looking for it to continue to weaken vs Crude here but will monitor closely.

Finally Bitcoin, where the technicals are consolidating and a push higher is more than likely as the bulls are still in control, only a trade below $27k would change our mindset:

Ok that is it, we just want to point out that higher rates haven’t really hit the equities because they are improving net interest margins, adding to the net risk free interest creation mechanism. Remember RRP and IORB generate $266Bn annually in net new interest money, this can be levered and it will improve the chances of supplanting any real downturn in credit for now. However we know a big wall of $4.8T in corporate debt is going to be refinanced and rates will more than double we bet and then we will see just exactly who has the wherewithal. As we have mentioned time and time again, its that first negative payroll print that we are really looking for to set things off down a different path. Till then equity bulls can continue their run, but will hit a wall as soon as that print comes…till next time

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