Settles and Tech Charts
61.8 Fibs lurking again
Alright let’s first take it right to the settles, where we had to fix a stale bug in our settlement sheet which is now rectified and hopefully corrected for good! Anyway here are the settlements for today 2/8/2022:
As you can see the Nasdaq and the Russell continue to be the laggards along side most of the equities and bond complexes. The energy sector the obvious supply constrained and inflation haven of investors with the sector nearly up 20% across the board YTD.
One chart we continue to watch sink is the US Govt yield curve spread of the 5s30:
We expect inversion by end of Q2 as the FED begins their rate hikes. With that said when looking at the US Govt 10Y we can only begin to believe that a mad rush to 2.13% may flush enough fast money out and usher in a new bond buying bonanza. We figure by the time that area is breached, the Fed Funds should be about 1.5% and the 10Y most likely trading swiftly back to 1.75%. That is about 4 to 6 hikes depending upon the Feds propensity to toss in a 50bp variety, but we doubt it. They will most likely slow walk this thing to death taking the equity and the bond markets with it.
Next up Crude, where we feel the 61.8 fib has a bit to say something about this recent warmongering run up:
Next up in equities, where we don’t feel this recent rally is anything more then a garden variety consolidation. The Nasdaq has gained some footing, yet the upside is capped by FED risk and we would rather think any of these back and fill run ups, will be used by smart players to promptly exit stage left:
As far as the SP500 it too is running into longer term 61.8 fibs and the 50 day eMA:
All in all nothing more than time consuming back and fill as the headwinds and specter of a tightening FED should be enough to tell investors, the free money leverage is now being reversed and as much as that squared affect works when the spigot is wide open, the devastation is swifter on the return side. Then again, there’s hardly any precedent in young algo minds for such lunacy, markets always rise…well until they don’t.
Finally Bitcoin, where the $42k level is back in style and we suspect Dorsey, Thiel and Musk have something up their sleeve in the near future that will propel this bad boy even further:
Till next time…
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