Stocks Doubled During the 1929 Yield Curve Inversion | Will This Time Be Different?

Here is today’s Youtube video:

Tune in for our outlook on crypto tomorrow morning covering:

– Recent major technical developments

– What on-chain data is currently telling us

– How monetary policy will impact Bitcoin over the next few months.

 

Do you mind sharing more details?

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13 comments

  1. (3) 3
    Phillip Rosenthal says:

    Any thoughts on what’s going on with Russel/Small Cap underperformance? It looks like it’s just continued to underperform even as Nasdaq and S&P has made a turnaround.

  2. (6) 6
    Keith Ng says:

    Hi Peter, great video as it always is, some questions I have :

    1) SPX has broken through the 4547 level impulsively and closed at 4575 today. Do you still hold the view that SPX is due for a correction to test the lows of February and March ? (If so, could you provide us with some key support levels to re-enter the markets or to sell the short positions, perhaps in the later videos/articles, please ?)

    2) If SPX indeed retests the lows of February and March, that would mean the 10-year bull market trend line you often mention would be broken once again. Would that be a bearish sign more than a bullish sign for the market ?

    3) The ten-year yield has once risen to 2.5% today, and from some of your previous articles/videos, you said 2.5% is a dangerous level to take caution for a bear market beginning very soon. Would like to know how you currently interpret this reading.

    1. (1) 1
      SURAJ783 says:

      @GOT Hi Peter, I posted a similar question on another post too. Thanks.

    2. (5) 5
      GOT says:

      1) SP500 could definitely give back some of its gains as you would expect in a regular uptrend (nothing goes straight up). We try to refrain from focusing on day-to-day price action, however, I would say that a retest of the previous low would be my worst-case scenario (based on the strength we’ve seen on the recovery so far). My preferred level of support would be around 4300 points. Again, this is far from guaranteed, investors need to be aware that our short-term calls are rarely high conviction.

      2) Weekly closes are what matter. Such a correction would likely be intra-week which would deal no technical damage. It would be concerning to see a weekly close well below the bull market trendline.

      3) Absolutely. It sounds the alarm for the last phase of the bull run leading up to the bull market top.

      1. (0) 0
        BBindelay says:

        Hey Peter

        What is this watch list you were referring to in the video?

        All the best

  3. (0) 0
    JUN says:

    Hi Peter, the small cap (IWM) is still unable to break out meanwhile SPX probably through the last phase of this round of rally, hope you could share some in-depth thoughts about the small cap. Thank you!

  4. (0) 0
    Frank Lakinski says:

    Hi Peter,

    Can you provide an update on ARKK? You stated it was forthcoming in your article on 3/20 and mentioned it in this video, but I don’t believe anything was posted.

    Thanks!

  5. (0) 0
    Brett Sutton says:

    A big thank you for your services man!!!!!!!!!!!! That’s all!

  6. (0) 0
    ggb58 says:

    Hello again Peter,

    I am back and do highly enjoy your informative videos. Can you explain what I have been looking at called the 10-2 yield spread?

    I do not understand what this number means but I see it has enormous movements daily and 52 week range.

    Why such a big spread number (ie yesterday it was 9 to 20 and 52 week range -29 to 162. These numbers are extreme and was just wondering is there any way to play the volitiliy in this spread? Just yesterday that spread lost 39%. Yet the 10 yr was up about 1.2% and the 2 yr up about 1.3% approx numbers. Yet this extreme distortion of -37% in one day spread value.

    Is this spread value of any investment plan that one can use? Especially in the environment we are in today.

    Thanks again for all your great videos.

  7. (0) 0
    NK says:

    Hi Peter,
    Can you provide an update on BTC? I just read that Terra is backing it’s coin with BTC. Reportedly, starting off with purchasing $125 million and eventually getting to $10 billion. Would love to hear your opinion on what this could mean and it this just the start of coins back with BTC.

    https://www.bloomberg.com/news/articles/2022-03-28/terra-adds-135-million-in-bitcoin-purchases-to-back-stablecoin

  8. (0) 0
    Charles Bransi says:

    Just became a member of this impressive site. Thanks for all the info. The title is about the yield curve inverting, but I believe the most important is the 3 months/10 years spread. This is what the FED research is looking at (See https://fred.stlouisfed.org/series/T10Y3M). The research also use that spread:
    1. https://www.federalreserve.gov/econres/notes/feds-notes/predicting-recession-probabilities-using-the-slope-of-the-yield-curve-20180301.htm
    2. https://www.federalreserve.gov/econres/notes/feds-notes/predicting-future-recessions-20190506.htm
    3. https://www.bostonfed.org/publications/current-policy-perspectives/2020/predicting-recessions-using-the-yield-curve.aspx

    One of the most interesting thing happening right now is that the 3 MO/ 10 YR spread is getting very large, doing the exact opposite of an inversion. This is a divergence with the 2 YR/ 10YR and the 5YR /10 YR. I have looked at previous recession, and they had a 3 months/10 YR inversion (as well as a 2YR/10YR and a 5YR/10YR). In the stock market right now, it is not happening. In fact, just the opposite. The spread is huge … It doesn’t seem any recession in sight.

  9. (0) 0
    adeel agha says:

    Great Content Sir. Thought i’d leave an appreciative comment 🙂

  10. (0) 0
    matsegubben says:

    Please do the same analysis on XLU/SPY from 2007 onwards and compare to what just happened with this ratio. IMHO this ratio is breaking out, it retested and held the breakout. Seems like it is convenient to use XLP/SPX if you are bullish on equities. If you are bearish then use XLU/SPX or XLU/SPX…. Just my 2 cents……

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