Some time ago in the Twitter / X stream, we commented that intra-day, risk had reached a pin-point structure, at which point we retreated from that area in a number of markets.
So was that a prediction? Anyone that spends any time around me knows my distaste for price-target trading, and predictions overall. What are we trying to determine with the state of Macro-Economics at this point? Inflation data? Data-dependent? Reverse of Globalization to structural inflation thesis?
We discuss this and more in the following entry …
You can find the video as below on YouTube, and is available in many other video venues (Vimeo, Odysee, etc)
Here is the the note itself, for this week on a 0 to 15 day Periodicity …
This Week on the Calendar:
Wednesday: 10:00 AM EST – ISM Services PMI. Consensus was 52.7 and actual was 51.4
12:00 PM EST – Fed Chair Powell Speech
Friday: 8:30 AM EST – NFP
SOFR Yield Curve: We have been sliding lower to higher yields on the key June 2025 SOFR contract we pay attention to for how the market is reading inflationary tells. While we may mean-revert at some point, the trend is clearly to higher yields.
Treasury Yield Curve: The yield curve is inverted. As it has been. For some time.
… and as with SOFR yields, from the 2 year to the Ultras, the trend is clearly to higher yields. And again as with SOFR, while a mean-reversion would not surprise me? It’s what happens AT the time of the mean-reversion, or rally, that I will be paying attention to. The 4 Week Bill Yield is 5.353%. The 52 Week Bill yield is now at 5.058%, and has been climbing to higher yields since the beginning of this year.
Overall Risk: (Stock Indices, Gold, Long Bond, Bills): Overall Risk, we remain neutral, in a general, broad, overall bias last week. We’re approaching a ‘decision’ moment, one way or another.
Equity Volatility: (VIX) We are at 14.67 and +0.07 at the moment on the day. We have volatility that I would rank as cool.
Equity Volatility VIX TERM STRUCTURE: We are in Contango throughout the terms, with no real ‘hiccups’ jumping out at us, at least the way we look at VIX Term Structure.
Equities: (SPY, SPX or possibly the /ES) We remain bullish on Equities.
S&P 500 High Yield: (SPHD) We remain bullish on S&P 500 High Yield price, bearish on yield.
Treasuries: (FRONT: SHY, MIDCURVE: IEI, IEF, BACKEND: TLT or the /ZT, /ZF, /ZN, /TN, /ZB and /UB). On SHY out to TLT, last week we switched to bearish on price, bullish on yield.
Emerging Markets: (PCY, VWO) On Emerging Market Debt prices (PCY), we remain neutral on price, neutral on yield. For Emerging Market Equity Prices (VWO), we remain bullish.
High-Yield: (HYG, JNK) We remain neutral on price, neutral on yield.
Commodities: (GSCI, DBC or GSG) We remain bullish on Commodity Prices as a whole index.
Crude Oil Term Structure: The entire forward curve out to 2027 is in backwardation.
Crude Oil Specifically: (USO, USL and /CL) We remain bullish on Oil Prices.
Gasoline Specifically: (UGA and /RB) We remain bullish on Gasoline Prices.
Gold and Silver Specifically: (GLD / /GC and SLV /SI) We remain bullish on Gold prices. We remain bullish on Silver.
Bitcoin / Crypto Markets: (/BTC or IBIT) Yeah, yeah. Not a fan, but it’s a solidified market segment at this point. We are neutral on Bitcoin / Crypto Markets at this point.
Currency: ($DXY:IFUS, UUP) We remain neutral on the US Dollar as an Index.
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