Markets closing down for 2019 right on time for the 3254 target, focus is now shifting towards event risk positioning into 2020 and participants seem happy to play the reflationary trades. This is an interesting swing to track with US election flows providing the ebb and flow.
The flows will now reflect in a lagged currency move with the Year-End repo funding. Smart money is on the back-foot since the crisis from September, the recent spike in DXY is coming from markets pricing another year end spike in funding tightness:
There is far better bang for your buck than buying US Equities at these levels, markets trading the final stages of an exuberance leg from the Phase 1 agreement and UK election tail risk and starting to run out of steam. This chart highlights only 4 times in the past 30 years has the US 2's vs 5's curve inverted whilst being in an upward moving yield environment, via Fed QT.
As usual thanks for keeping the support coming with likes, comments, questions and etc! Feel free to jump into the conversation in the comments with your views/charts.
@Finswole, The world can be burning and in the the midst of a nuclear total war and the fed can still shoot the market up to record highs.
lu1977hk
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Any update??
ridethepig
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We remain in the same levels and targets @lu1977hk, a fresh monthly chart update here coming early in the week.
gerFX
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the price has broken far too high above your hypothesis fib levels which are now invalidated. the complete move needs to be reassessed and the risk of seeing the exact same thing as during january 2018 must be taken into consideration
ridethepig
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A slight overshoot of the 3254, but no need for reassessment unless bulls hold 3254 for the Quarter @gerFX
ridethepig
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@ridethepig, and ...3254 held before we got the selloff!
gerFX
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the only impulsive thing here is the upside, not the downside. the fed has kept this market alive with an incredible cost of money printing like never seen before this is certainly not to let it down a couple of months before the elections. they are not that stupid !
ridethepig
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The problem is not the Fed @gerFX but rather the WH
you think the fed will allow this? please wake up