WELCOME

Welcome and thank you for visiting!

The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
* My posts are also re-published by several other websites and I have no control as to when their editors do so, or for the accuracy in their editing and reproduction of my content.
* From time to time, I will add updated market information and charts to some of my articles, so it's worth checking back here occasionally for the latest analyses.

DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

Dots

...If the dots don't connect, gather more dots until they do...or, just follow the $$$...

Cabin

Cabin

Events

UPCOMING (MAJOR) U.S. ECONOMIC EVENTS...
* Wed. Aug. 22 @ 2:00 pm ET ~ FOMC Meeting Minutes
* Mon. Sept. 3 ~ U.S. and Canadian markets closed for Labour Day Holiday
* Fri. Sept. 7 @ 8:30 am ET ~ Employment Data
* Wed. Sept. 12 @ 2:00 pm ET ~ Beige Book Report
* Thurs. Sept. 13 @ 8:30 am ET ~ MoM & YoY CPI & Core CPI Data
* Wed. Sept. 26 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Mon. Oct. 8 ~ Canadian markets closed for Thanksgiving Day Holiday
* Tues. Nov. 6 ~ U.S. Midterm Elections
* Thurs. Nov. 8 @ 2:00 pm ET ~ FOMC Announcement
* Thurs. Nov. 22 ~ U.S. markets closed for Thanksgiving Day Holiday & NYSE closes early @ 1:00 pm on Fri. Nov. 23
* Wed. Dec. 19 @ 2:00 pm ET ~ FOMC Announcement + FOMC Forecasts and @ 2:30 pm ET ~ Fed Chair Press Conference
* Tues. & Wed. Dec. 25 & 26 ~ Canadian markets closed for Christmas & Boxing Day Holidays
* Tues. Dec. 25 ~ U.S. markets closed for Christmas Day Holiday & close early @ 1:00 pm on Mon. Dec. 24
*** Click here for link to Economic Calendars for all upcoming events

IMPORTANT BLOG POST UPDATES...
* Trade Wars have escalated and now include diplomatic wars PLUS President Trump is cannibalizing prior U.S. market gains with his tariff tantrums against its world trading partners, while destabilizing a delicate world market balance

Saturday, July 21, 2018

U.S. Banks and 2 & 10-Year Yields

During the past year, or so, U.S. 2-Year Treasury Yields have shot up sharply, in comparison with 10-Year Yields, as shown on the following weekly price comparison chart and percentage comparison chart.



The next (longer-term) percentage comparison chart shows the weakness that ensued in the SPX when the 2-YT crossed below the 10-YT.


The following (short-term) percentage comparison chart shows that the 10-YT gained more this past week than the 2-YT.


Keep an eye on whether last week's outperformance of the 10-YT was just an anomaly, or whether it may be a signal of a potential tightening of the spread between it and the 2-YR. If we see a continued narrowing of this spread, it may signal bad news for U.S. bank stocks, and, potentially, the SPX.

At the moment, the Financials ETF (XLF) is hovering just above major support at 27.00, as shown on the following monthly chart, and the banks stocks are stuck in their respective consolidation zones, as shown on the last monthly chartgrid.

Watch for signs of weakness if:
  • XLF drops and holds below 27.00
  • bank stocks break and hold below their congestion zones, and
  • the spread narrows between the above-mentioned 2 and 10-YR yields.

On a more ominous note, if, longer term, we see a crossover of the 2-YR below the 10-YR on accelerating momentum, we'll likely get quite an equity market downturn.