There is a setup in the markets currently that mirrors the setup just before Black Monday in 1987 that you should be aware of. This does not mean that history repeats; as traders we look at probabilities first. Let me make the case: In 1987, from June to October, the market was seeing a winning … Read more
Since the March lows, we have seen the Fed do incredible things never seen before. It started with conventional things (like slashing rates and providing liquidity to markets) and quickly spiraled into modern day money printing via debt monetization and, even more drastically, buying corporate junk bonds.
Stocks are at an all-time high fueled by an accommodative Fed, improving trade war sentiment, and a steepening yield curve. What do all three of these things have in common? They are all major contributors to the resurgence of the “Reflation Trade.” The Reflation Trade refers to the idea that all the easy money from … Read more
Let’s talk about the yield curve. What is it? Yield curve is a visual representation of the “spread” or difference between government bonds of different maturities. For example, if the 10yr bond has a rate of 2% and the 2yr bond has a rate of 1% that would mean the 10y/2y spread is 1%, or … Read more
The U.S. Dollar has been very much in focus over the past couple of months. Traders believe that the Fed’s easing policies may have a negative effect on the Dollar moving forward. It won’t, and here is why. All currencies are traded as relative value, meaning that in order for the Dollar to fall another … Read more