On to a Whole New Subject, Rising Interest Rates
Stock Market Has Topped
The Stock Market Top is in place and the FED has had a chance to over react to the virus and scared investors who remain clueless.
And we have had the required initial bounce in the Dow and S&P
The FED Over reacted by a huge margin
and has put in place a 39 Year Swing Point in the 20 year T-Bond.
So we now have the Un-Volker for those trading in 1981. It is time to take a look at interest rates in a much different way.
We got out of our long T-Bond position, one that we had held for years, last June, way to early and have been concentrating on the build of a short position in the S&P.
Today we are starting the build of a short position in T-bonds with the ETF TBT, a leveraged trade.
This is due to a number of reasons, some FED oriented (they over-reacted), some China bond dumping as they seek cash, and some supply side inflation oriented as production cuts of raw materials and climate related cuts in food supply come into play. Oil is not a factor as changes in energy acquisition structurally are sowing its decline in usage.