The purple cup and handle (C&H) pattern has the base at 0.16% and rim at 0.42% so that is 0.26 percentage-points difference targeting 0.68% which easily occurred. The blue line is an excellent fit with lots of touches at 1.10-ish. Using that as a neck for a funky blue head and shoulder (H&S) pattern has the head at 0.16% and neckline at 1.10% so that is 0.96 percentage-points difference targeting 2.08%. Bingo, the 2-year yield is in this neighborhood so perhaps lots of sideways is ahead.
Everybody on Wall Street guarantees that inflation is ahead and wages will rise. The Uber driver said everyone knows yields are going higher from here and stocks will continue higher as well. The bellboy said there are no worries in the market and the only thing that could possibly happen is for the yield curve to invert in the months ahead but even so it will be many more months before the economy and markets roll over. After hearing this rosiness, no wonder everyone is cheering, dancing and singing with euphoric joy as they buy stocks at the ask.
Not one analyst or trader says disinflation and deflation will rule the roost this year and wages will remains subdued. No one says that demand will be far weaker than everyone realizes and the growth expectations are overblown. No one says the healthy housing and auto data to end the year and begin 2018 is mainly because of the hurricane and monsoon rebuilding. The economy has performed many fits and starts over the last few years. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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