XLE Energy ETF Daily, Weekly and Monthly Charts; Overbot; M-Top (Double-Top); Negative Divergence; Upper Band Violations

Energy is cooked. Stick a fork in it. Goodnight Irene, Irene Goodnight. The jackasses are coming out of the woodwork telling you to buy energy stocks with both hands. Of course they are because they are dumping their shares. Charlatans. The purple circles on the daily chart show 4 distribution days this month the smart money selling energy stocks to the dumb money; the suckers. Are you a bag-holdin' sucka?

The ole pump and dump scheme is in full effect right now with rampant cheerleading of the energy stocks. Fund managers, whose main goal is to bring money into the fund, proclaim that now is the time to buy energy stocks with both fists as opposed to three months ago when they were 20% to 30% lower? Huh? The pundits are pumping and dumping getting Joe Sucka all bulled-up on energy stocks and the pumper just so happens to have some shares he can sell you. The smart money is in distribution now having enjoyed and profited from the big 3-month rally.

You can see the M-Top, or Double-Top, formation on the daily and monthly charts a bearish chart pattern. The far leg of the M is now playing out in these time frames and obviously the M on the monthly chart tells you that energy stocks are entering a multi-month down move.

The charts display rising red wedges a bearish chart pattern. Indicators are overbot agreeable to a pullback in all time frames. The daily chart was cooked and topped-out a couple weeks ago and there was no reason for price to come back up again for another high in this daily time frame but the maroon arrow shows that price did spike intraday on Thursday, probably as a television pundit was promoting energy stocks. Pause for laughter.

The maroon lines for the indicators on the daily chart show clear negative divergence that wants to smack price lower in the daily time frame. The ADX line is nowhere near 30 for the last half year which states that the big 3-month rally in XLE was NOT a strong trend higher in the daily time frame. In other words, something that was never strong to begin with would not be expected to continue. The lower band and 50-day MA are in play at 88.

The XLE weekly chart displays a bearish rising wedge and 4 distinct tops across the upper trend line. The ADX, however, shows that the trend higher has weakened during each of the Four Tops a bearish indication. The pink box shows that the ADX identified a strong trend higher during the first half of 2022, on the weekly basis, but not since. Price is stumbling choppy sideways for the last year through 72-92.

The upper band is violated on the weekly chart so the middle band, that is also the 20-wk MA, at 84, is on the table as well as the lower band at 74. There is strong price support in the 74-77 area (blue line). Stochastics are overbot on the weekly chart agreeable to a pullback.

The negative divergence is glaring on the weekly chart beginning a multi-week downturn. The Aroon green line on the weekly chart shows that nearly all energy bulls remain bullish and the red lines shows that about two-thirds of the energy bears also believe that XLE will continue higher forever. Most everyone believes that energy stocks will go higher but the Aroon is a contrarian indicator (the expectation is for a retreat in XLE and a negative red cross).

The monthly chart is scary if you are long energy. Energy is placing a bigtime multi-month top right now due to the universal negative divergence across all chart indicators (red lines). Price is out of juice to the upside so XLE must bend over and receive its spankdown.

The ADX on the monthly chart shows that the big drop lower in XLE as the COVID-19 pandemic hit in 2020 was a strong trend lower but that petered out as 2021 started (due to the obscene Fed (monetary) and Congressional (fiscal) stimulus (irresponsible spending). Energy stocks launched higher off the possie d bottom (green lines) and bags of easy money. The ADX shows that the rally higher in XLE was a strong trend in the backhalf of 2022 and into this year but the strong trend higher on the monthly basis is now petering out.

XLE is pumped up to 93 near the upper band at 94.58 so do not rule this out as a blow-off top as October begins (94-97). The middle band at 80 would then be in play (about -20% lower). Right now, energy bulls are picking up nickels in front of a bulldozer.

The three XLE charts representing the daily, weekly and monthly time frames are ugly and bearish. You do not want to be long energy stocks; instead choose your entries to be short. Energy stocks are topping now and should fall in price for several months probably into the first part of 2024. Don't be a sucka. Let the institutions hold the bag for a change. Keystone is not in energy stocks long or short right now but would look to play XLE or ERX short or ERY long going forward. 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.

Note Added 10/2/23, Monday Morning, at 4:18 AM EST: XLE begins the new week of trading at 90.39. For all of you long energy stocks, are you starting to clench your buttocks and wipe beads of sweat from your forehead?

Note Added 10/3/23, Tuesday Morning, at 5:07 AM EST: XLE collapses -2% to 88.59 the lowest since August.

Note Added 10/4/23, Wednesday Morning, at 9:55 AM EST: XLE is puking -4.5% this week thus far. Of course it is. Energy is receiving the neggie d spankdown.

Note Added 10/5/23, Thursday Morning, at 7:40 AM EST: XLE pukes over -5% this week thus far. The neggie d spankdown continues in energy and as forecasted with oil. XOM collapses -5.2% so far this week with CVX down -3.3% and OXY down -4%. Warren Buffett the senile jackass always liked Occidental and probably still owns a boatload. OXY has crashed more than -12% in the last 15 days. XOP collapses more than -7% this week thus far..

XLK Technology Sector ETF Weekly Chart; Tech Stocks Fall into a Correction Down -10.5% Off the Top

XLK, the tech sector ETF, drops into a correction falling -10.5% off the top. Traders call a -10% pullback a correction and a -20% pullback is a bear market. 10 weeks ago, XLK tops out at 181 and drops to 162.

Tech workers are clenching their buttocks and holding on tight to their fleece vests like a blankie, hoping that a pink slip is not in their future. Silicon Valley employees are so worried, stressed and worked-up about the path forward they can barely keep down their granola energy bars and breakfast smoothies. Don't Worry Baby. 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.

Note Added 9/28/23, Thursday Morning, at 5:21 AM EST: XLK drops to 160 yesterday and now sits at 162. 

Note Added 10/2/23, Monday Morning, at 4:10 AM EST: XLK is at 164. Bring up the XLK weekly chart. You see that price prints a lower low last week as compared to 6 weeks prior and the chart indicators for the last 2 months are all weak and bleak. That is a sad chart. Any of you invested in tech stocks are going to get punched in the face for the next few weeks. XLK is expected to drop  going forward. A multi-week down move is in progress and should continue for much of October.

UST2Y 2-Year Treasury Note Yield Weekly Chart; Overbot Yields (Oversold Note Prices); Rising Wedge; Negative Divergence; Tight Band Squeeze Will Create a Huge and Fast Move in 2-Year Yield

Here is another look at the 2-year yield weekly chart that was posted a week or two ago along with the daily and monthly charts. A top is at hand in the 2-year yield which will surprise all of Wall Street that expects higher yields forever going forward. 

The yield chart can be confusing especially to novice traders and market participants just getting their feet wet trading the corrupt crony capitalism system. Yields moving higher means Treasury prices are moving lower and this activity, which has been occurring for the last 2 years, is bond bearish (selling notes and bonds so prices drop sending yields higher).

Conversely, yields moving lower means notes and bonds will be bid going forward (prices will move higher as investors and traders buy notes and bonds so yields will trail lower). Thus, it is tricky to use the words bearish and bullish when discussing the charts. For example, when discussing bond bullishness and yield bullishness they are opposite conditions. Bond bullishness means note and bond prices will move higher and yields lower. Bond bears expect note and bond prices to drop and yields move higher. Did this discussion sufficiently confuse any of you new to trading? Yes, Keystone, it is all clear as mud now.

Anyhoo, the chart is set up for the 2-year yield to receive a spankdown going forward on the weekly basis. Plan accordingly. The red rising wedge is a bearish chart pattern. The stochastics are oversold agreeable to a pullback in yields. Most importantly, the red lines show universal negative divergence across all chart indicators. As yield moves higher, the indicators are clearly out of gas displaying neggie d over the last month as well as over the last year. It is nasty and yields should retreat going forward unless of course if the Federal Reserve plays more games with market intervention.

The purple arrows show tight standard deviation band squeezes that forecast a big move ahead. The tight squeezes, however, do not predict direction. Think of a tube of toothpaste. You start to press it harder and harder, you know any second the cap is going to fly open and the toothpaste will squirt wildly and violently out of the tube, but you do not know what direction it will fly. The two prior band squeezes created further sharp moves higher in yield but you will have to wait for a couple-three weeks to see which direction the yield runs this time (the expectation is a sharp move lower).

The ADX pink box shows how the run-up in yields was a strong trend higher but in May, the strong trend is lost and with the ADX down at 15 there is no longer any strong trend in place for yields on the weekly basis. That's funny since all of Wall Street says the yields are in a strong trend higher and ready to make more new highs in yields going forward. The ADX says they are all wrong.

The green Aroon line represents traders that expect yields to move higher and basically all of them continue to believe that yields will go up forever. The Aroon red line represents traders that expect yields to drop and they have basically zero conviction that yields will pull back (the traders that expect lower yields are also resigned to the situation that yields will go up forever). The Aroon is a contrarian indicator showing you that the boat remains fully loaded on the higher yields forever side of the boat (bond and note prices down and yields moving higher going forward) but the crowd is always wrong. Keystone is sitting on a broken deck chair on the other side of the boat, by himself, but he figures that folks will come over and join him in time. Maybe Keystone can play guitar and sing to bring people over but then again, that may scare them and keep them a Million Miles Away.

Summing up, all the indicators on the chart say the 2-year yield will drop going forward on the weekly basis and the tight band squeezes forecast that the move lower may be super sharp and fast. One thing to keep in mind is that the Fed may intervene which would adjust the picture painted but barring that, yields will drop going forward on the weekly basis and traders will be surprised.

Keep in mind that if yields are in retreat it is likely that the stock market is selling off and that money exiting equities then flows into notes and bonds sending yields lower. The SPX weekly chart remains weak and bleak so this outcome is real and likely going forward on the weekly basis.

The prior chart posted shows the 2-10 spread (US yield curve) and the expectation is for a continued dis-inversion going forward. Thus, if yields will drop going forward, and the yield curve dis-inverts to ring in the recession, it means that the 2-year yield will drop at a faster pace than the 10-year yield.

TLT is set up with positive divergence so it is expected to rally off its lows going forward contrary to a jackass technician talking on Bloomberg right now (6 AM EST) that says TLT will continue lower as yields continue higher. Keystone does not have any longs or shorts in the Treasury arena right now but TLT is on the list of potential long plays (the TLT ETF represents bond prices so it has been dropping like a rock as yields move higher so if yields will retreat going forward as per the analysis above, TLT should rally). 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.

Note Added 9/28/23, Thursday Morning, at 10:42 AM EST: Current yields are; 2-year 5.10%, 5-year 4.71%, 10-year 4.66%, 30-year 4.78%. Thus, 4.66% - 5.10% = -0.44% = negative 44 basis points (bips) for the yield curve. Recession is only 4 bips away at the -40 bips line in the sand for the 2-10 spread. Bond yields are up, down, down, up, any way you want it like Jimmy sings.

YC2YR 2-10 Spread (Yield Curve) Daily Chart; US Yield Curve Dis-Inverting for 3 Months; -40 Bips Line in Sand Will Bring on Recession; October's Yield Curve Least Inverted in 15 Months (July 2022) Only 11 Bips from Complete Dis-Inversion!!

The 2-10 spread, the yield curve, is dis-inverting again. While no one was looking, the US yield curve dis-inverts for the last 3 months.

Keystone says it is not so much the inversion that brings on recession as it is the hook pattern. Once the blue hook forms and the yield curve dis-inverts, that will bring on the recession and as it approaches and runs above the inversion line to completely dis-invert (the 10-year yield moves back above the 2-year yield), the recession will be guaranteed.

Note the many hook teases over the last year. Many thought the US would be in recession this year (including Keystone that still thinks that) as the yield curve started to dis-invert during December then thwack, the 2-10 spread was smacked lower again as conflicting inflation data and central banker intervention sends yields to and fro.

Another hook pattern started to form during the banking crisis this year in March and it looked like the recession was coming on fast with the steep ascent of the yield curve then thwack, the dis-inversion was halted at the red resistance line at -40 bips. Write this number on your forehead because it is a critical number going forward.

As the new blue hook attempts to dis-invert the yield curve again now, watch to see if the -40 bips level gives way to more dis-inversion and ultimately complete dis-inversion. A move above -40 bips will signal that the recession is at hand and a complete dis-inversion back above zero will confirm that the recession is fully in play. At that time, we find out if it is a soft or hard landing. Many of you will have plenty of time to watch the drama at home because you will be sh*t-canned at work.

The current dis-inversion behavior is obeying that upward-sloping purple channel. Typically, the first stab at -40 bips, should it occur, would result in a spank down. There is likely support now at the -60 to -65 bip range.

Current real-time yields this Tuesday Morning, 9/26/23, are; 2-year 5.12%, 5-year 4.58%, 10-year 4.50%, 30-year 4.62%. Thus, 4.50% - 5.12% = -0.62% = negative 62 basis points (bips). Note that the 5-30 spread is a positive 4 bips and the 10-30 spread is positive 12 bips both are not inverted.

The initial yield curve inversion in April 2022 was fleeting amounting to only dipping a big toe in the water. The inversion hits again and deepens starting July 2022. Typically, a recession appears 6 months to 24 months after a yield curve inversion with an average of 18 months. The US is at 18 months now from the initial inversion and 15 months from when the July 2022 inversion started. The recession is in your neighborhood, peeking in windows, looking around for your house.

The yield curve is dis-inverting over the last few days as yields float higher so, by definition, the 10-year yield (longer duration) is moving up faster than the 2-year. The 10-year yield is sticky around 4.50% currently. Everybody and his brother on Wall Street calls for higher rates ahead.

In prior charts, Keystone lays out the scenario that if the stock market tanks, which the SPX weekly chart says it will going forward, the money leaving stocks will flow into notes and bonds sending yields lower. Under this scenario of lower yields, and continued dis-inversion, the 2-year yield would drop faster than the 10-year yield. No one expects this outcome. 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.

Note Added 9/27/23, Wednesday Morning, at 3:00 AM EST: Current yields are; 2-year 5.05%, 5-year 4.59%, 10-year 4.51%, 30-year 4.65%. The 2-year yield made an adjustment yesterday so give it a couple days to line out. Thus, 4.51% - 5.05% = -0.54% = negative 54 basis points (bips). Recession is only 14 bips away.

Note Added 9/28/23, Thursday Morning, at 4:45 AM EST: Current yields are; 2-year 5.12%, 5-year 4.69%, 10-year 4.62%, 30-year 4.74%. Thus, 4.62% - 5.12% = -0.50% = negative 50 basis points (bips). Recession is only 10 bips away. It's just a kiss away as U2, Fergie and Mick jam.

Note Added 9/28/23, Thursday Morning, at 7:00 AM EST: Current yields are; 2-year 5.12%, 5-year 4.71%, 10-year 4.64%, 30-year 4.76%. Thus, 4.64% - 5.12% = -0.48% = negative 48 basis points (bips). Recession is only 8 bips away. Step by step, inch by inch.

Note Added 9/28/23, Thursday Morning, at 9:00 AM EST: Bond yields go psycho dropping then popping. Current yields are; 2-year 5.12%, 5-year 4.70%, 10-year 4.65%, 30-year 4.77%. Thus, 4.65% - 5.12% = -0.47% = negative 47 basis points (bips). Recession is only 7 bips away and the 2-10 spread is going its own way.

Note Added 9/28/23, Thursday Morning, at 10:39 AM EST: Current yields are; 2-year 5.10%, 5-year 4.71%, 10-year 4.66%, 30-year 4.78%. Thus, 4.66% - 5.10% = -0.44% = negative 44 basis points (bips). Recession is only 4 bips away. Bond yields are up, down, down, up, any way you want it like Jimmy sings.

Note Added 10/2/23, Monday Morning, at 4:24 AM EST: The corrupt US Congress agrees to avert a government shutdown on the weekend by kicking the can down the road for 45 more days. The sickening drama will continue through Halloween into just before Thanksgiving when another government shutdown deadline will occur. The US yields are; 2-year 5.09%, 5-year 4.66%, 10-year 4.62%, 30-year 4.74%. The 2-10 spread is at negative 47 basis points. Recession is only 7 bips away. The 5-30 spread is a positive 8 basis points (not inverted). America will be singing the blues like Roy Brown in Big Town if the 2-10 dis-inverts another 7 bips. Recession is on the front porch peaking in the window.

Note Added 10/3/23, Tuesday Morning, at 4:00 AM EST: The US yields are; 2-year 5.09%, 5-year 4.70%, 10-year 4.67%, 30-year 4.78%. The 2-10 spread is at negative 42 basis points. Recession is only 2 bips away now testing the critical -40 bips resistance. Two bips is nothing, the trio of beautiful back-up singers for Steve can rattle off a dozen bips, or bups, in a few seconds.

Note Added 10/3/23, Tuesday Morning, at 6:08 AM EST: The US yields are; 2-year 5.11%, 5-year 4.72%, 10-year 4.70%, 30-year 4.81%. The 2-10 spread is at negative 41 basis points. Recession is only 1 bip away now testing the critical -40 bips resistance. Typically, the 2-20 spread would be expected to be rejected at the -40 bips resistance on the first try to break up through. The yield curve would then regroup after a day or few and move higher again likely taking the -40 bips out and ushering-in a US recession. The jury remains out if the 10-year yield plans to move up faster than the 2-year yield, or, if the 2-year yield moves lower faster than the 10-year yield (this scenario likely occurring as the stock market is selling off as recession fears escalate). One Last Breath.

Note Added 10/3/23, Tuesday Morning, at 8:02 AM EST: The US yields are; 2-year 5.12%, 5-year 4.75%, 10-year 4.73%, 30-year 4.85%. The 2-10 spread is at negative 39 basis points printing a 38 handle minutes ago. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero. Let the festivities begin.

Note Added 10/3/23, Tuesday Morning, at 8:25 AM EST: The US yields are; 2-year 5.12%, 5-year 4.75%, 10-year 4.74%, 30-year 4.86%. The 2-10 spread dis-inverts to negative 38 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero. The festivities continue.

Note Added 10/3/23, Tuesday Morning, at 11:40 AM EST: The US yields are; 2-year 5.14%, 5-year 4.78%, 10-year 4.78%, 30-year 4.92%. The 5's and 10's are at parity. The 2-10 spread dis-inverts to negative 36 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero.

Note Added 10/3/23, Tuesday Afternoon, at 2:33 PM EST: The US yields are; 2-year 5.14%, 5-year 4.79%, 10-year 4.80%, 30-year 4.93%. The 2-10 spread dis-inverts to negative 34 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero. It is Tuesday Afternoon so you have to listen to the Moody's.

Note Added 10/4/23, Wednesday Morning, at 3:52 AM EST: The US yields are; 2-year 5.16%, 5-year 4.83%, 10-year 4.83%, 30-year 4.95%. The 30-year tags 5% overnight and then pulls back. The 10-year tags 4.88%. Yields print multi-decade highs. The 2-10 spread dis-inverts to negative 33 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero. Yields are moving higher due to the mix of Fed talk, Congressional disfunction (no House speaker), and inflation, jobs and JOLTS data. Over the last 8 days, the 2-year yield is up only 4 bips but the 10-year yield is up 33 bips. Obviously, the long end is moving higher a lot faster than the short end which is dis-inverting the yield curve and ringing in the pending recession. The yield curve is the least inverted since October 2022 one year ago! Both stocks and bonds are selling off as the leaves are turning brown and the sky grey.

Note Added 10/4/23, Wednesday Morning, at 9:34 AM EST: The US yields are; 2-year 5.09%, 5-year 4.75%, 10-year 4.75%, 30-year 4.87%. Yields retreat. The 2-10 spread dis-inverts to negative 34 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero. The front end of the curve (2-year) is stick around that 5%+ level; it would be interesting if it fell below 5%.

Note Added 10/4/23, Wednesday Afternoon, at 3:54 PM EST: The US yields are; 2-year 5.04%, 5-year 4.71%, 10-year 4.72%, 30-year 4.86%. Yields retreat. The 2-10 spread dis-inverts to negative 32 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero.

Note Added 10/5/23, Thursday Morning, at 3:32 AM EST: The US yields are; 2-year 5.05%, 5-year 4.73%, 10-year 4.75%, 30-year 4.88%. The 2-10 spread dis-inverts to negative 30 basis points on the verge of a 2-handle. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero now only 30 little bips away.

Note Added 10/6/23, Friday Morning, at 2:20 AM EST: The US yields are; 2-year 5.03%, 5-year 4.70%, 10-year 4.73%, 30-year 4.90%. The 2-10 spread dis-inverts to negative 30 basis points on the verge of a 2-handle. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero now only 30 little bips away. The US Jobs Report is on tap in a few hours and should dramatically move markets.

Note Added 10/6/23, Friday Morning, at 8:39 AM EST: The US yields are; 2-year 5.12%, 5-year 4.80%, 10-year 4.83%, 30-year 4.99%. The 2-10 spread dis-inverts to negative 29 basis points a 2-handle! Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero now less than 30 bips away. The Jobs Report creates drama and they yield curve continues dis-inverting.

Note Added 10/6/23, Friday Morning, at 9:03 AM EST: The US yields are; 2-year 5.12%, 5-year 4.87%, 10-year 4.86%, 30-year 5.02%. The 2-10 spread dis-inverts to negative 26 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero now only 26 bips away.

Note Added 10/6/23, Friday Morning, at 9:38 AM EST: The US yields are; 2-year 5.10%, 5-year 4.80%, 10-year 4.85%, 30-year 5.01%. The 2-10 spread dis-inverts to negative 25 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero now only 25 bips away. From early this morning, the 2-year yield pops 7 bips and the 10-year pops 12 bips that further dis-inverts the yield curve sending it up towards zero and recession.

Note Added 10/11/23, Wednesday Morning, at 4:53 AM EST: The US yields are; 2-year 4.96%, 5-year 4.56%, 10-year 4.56%, 30-year 4.73%. The 5's and 10's are at parity. The 2-10 spread dis-inverts to negative 40 basis points. Recession is here if the 2-10 spread remains above -40 bips and heading towards complete dis-inversion at zero only 40 bips away. Over the last few days, the 2-year yield drops only 14 bips while the 10-year yield drops 29 bips. This back kiss of the -40 bips is for all the recession marbles. Recapping the action, the yield curve dis-inverts from well below -100 bips up to -25 bips piercing up through the critical -40 bips resistance that now becomes support. The 2-10 spread now drops to -40 bips for the back test of this critical level. If the yield curve bounces from here and moves above -25 bips towards zero, the recession is here (despite 100% consensus that a recession is nowhere in sight). If the yield curve falls below -40 bips and inverts more again moving lower to -50 bips and -60 bips, everyone will be correct and the recession will remain delayed preferring to hang out with Godot. Watch this back kiss and test of the -40 basis points support closely. The major decision of whether or not a recession begins right now in real-time depends on which way the 2-10 spread goes. So far it is a textbook back kiss of support and a bounce would be expected to further dis-invert towards zero but it has to play out this week. Investors are buying-up the long duration notes and bonds sending prices higher and yields lower stalling the dis-inversion activity.

Note Added 10/11/23, Wednesday Morning, at 5:06 AM EST: The US 2-year yield is at 4.95% and the 10-year 4.55%. The 2-10 spread (yield curve) is -40 bips. The drama continues. Bounce or die.

Note Added 10/11/23, Wednesday Morning, at 6:20 AM EST: The US 2-year yield is at 4.96% and the 10-year 4.55%. The 2-10 spread (yield curve) is -41 bips. Recession versus no recession battle it out.

Note Added 10/11/23, Wednesday Morning, at 8:21 AM EST: The US 2-year yield is at 4.98% and the 10-year 4.58%. The 2-10 spread (yield curve) is -40 bips. Recession pushes back. PPI data on tap.

Note Added 10/11/23, Wednesday Morning, at 9:02 AM EST: The US 2-year yield is at 4.99% and the 10-year 4.57%. The 2-10 spread (yield curve) is -42 bips. The no recession slaps the recession in the face. The battle will continue but probably by the end of the week the direction forward should reveal itself.

Note Added 10/12/23, Thursday Morning, at 3:30 AM EST: The US 2-year yield is at 5.00% and the 10-year 4.56%. The 2-10 spread (yield curve) is -44 bips. The no recession camp is walking around with their chests puffed-out. The battle will continue but probably by the end of the week the direction forward should reveal itself. The no recession camp is winning right now (yield curve moves lower towards -50 bips) but CPI data is on tap in 5 hours. The back test of the -40 bips will be a failure of support (die) unless the 2-10 spread dis-inverts back to -40 bips and then bounces higher towards -30 bips ushering in recession. The yield curve has to make its decision this week.

Note Added 10/12/23, Thursday Morning, at 8:32 AM EST: The US 2-year yield is at 5.05% and the 10-year 4.59%. The 2-10 spread (yield curve) is -46 bips. Yields pop higher on the gut reaction to the CPI data. The 2-10 spread becomes more inverted so the critical -40 bips line in the sand will become resistance again if its support fails which is occurring.

Note Added 10/12/23, Thursday Morning, at 9:00 AM EST: The US yields are; 2-year 5.06%, 5-year 4.62%, 10-year 4.59%, 30-year 4.71%. The 2-10 spread (yield curve) is -47 bips. It appears that the -40 bips support has failed unless the situation changes quickly today.

Note Added 10/12/23, Thursday at Munch Time, at 12:37 PM EST: Whoopsies daisies. The US 2-year yield is at 5.07% and the 10-year 4.66%. The 2-10 spread (yield curve) is -41 bips. Maybe the critical -40 bips S/R is not failing after all.

Note Added 10/12/23, Thursday Afternoon, at 2:53 PM EST: Wow. The US 2-year yield is at 5.07% and the 10-year 4.71%. The 2-10 spread (yield curve) is -36 bips. The 10-year yield jumps 5 bips over the last couple hours but the 2-year yield remains planted. The 30-year bond auction was ugly creating market angst (weak demand; prices down; yields up). Has the Federal Reserve lost control of the narrative? The recession is on the table now and would be confirmed if the 2-10 spread moves above -25 bips and the recession will be in full swing when the yield curve completely dis-inverts above zero. The excitement and drama continues.

Note Added 10/13/23, Friday the 13th, at 4:51 AM EST: The US 2-year yield is at 5.04% and the 10-year 4.64%. The 2-10 spread (yield curve) is -40 bips. The US recession is in play now and riding on the -40 bips S/R trying to make a decision. Another back test of the critical -40 bips support occurs. Do you think the -40 bips S/R is important? It will be very telling when the spread commits one way or the other.

Note Added 10/13/23, Friday the 13th, at 12:17 PM EST: The US 2-year yield is at 5.05% and the 10-year 4.62%. The 2-10 spread (yield curve) is -43 bips. The no recession camp slaps the recession folks in the face as the yield curve re-inverts lower. The drama continues. You will know that the US recession is underway if the 2-10 spread dis-inverts to -40 bips, -25 bips and zero. For now, America's wealthy elite, and the upper middle class sycophants that service the wealthy, continue spending money keeping the economy afloat.

Note Added 10/14/23, Saturday: The US 2-year yield is at 5.05% and the 10-year 4.61%. The 2-10 spread (yield curve) is -44 bips. The no recession camp is walking around this weekend with chins held high and chests puffed. Puff the Magic Dragon lives by the sea. The yield curve saga continues on Monday.

Note Added 10/16/23, Monday, at 2:15 AM EST: The US 2-year yield is at 5.07% and the 10-year 4.67%. The 2-10 spread (yield curve) is -40 bips once again testing the critical S/R line in the sand. 

Note Added 10/16/23, Monday, at 3:00 AM EST: The US 2-year yield is at 5.08% and the 10-year 4.69%. The 2-10 spread (yield curve) is -39 bips once again the recession is knocking at the front door. 

Note Added 10/16/23, Monday, at 4:33 AM EST: The US 2-year yield is at 5.07% and the 10-year 4.69%. The 2-10 spread (yield curve) is -38 bips. The recession camp is excited thinking that the yield curve dis-inversion will continue.

Note Added 10/16/23, Monday, at 6:26 AM EST: The US 2-year yield is at 5.07% and the 10-year 4.70%. The 2-10 spread (yield curve) is -37 bips. The yield curve dis-inversion continues.

Note Added 10/16/23, Monday, at 3:40 PM EST: The US 2-year yield is at 5.10% and the 10-year 4.70%. The 2-10 spread (yield curve) is -40 bips.

Note Added 10/17/23, Tuesday, at 3:42 AM EST: The US 2-year yield is at 5.10% and the 10-year 4.75%. The 2-10 spread (yield curve) is -35 bips. The 2-10 spread is gunning for the -25 bips resistance that would then become support and usher-in the recession as the yield curve then continues higher towards zero and complete dis-inversion. It is quite a saga due to the world's central banker's and government's obscene money-printing and providing stimulus over the last couple decades. It would likely be game-over and the recession guaranteed if the 2-10 spread takes out the -25 bips level heading higher. This resistance is only 10 basis points away.

Note Added 10/17/23, Tuesday, at 9:00 AM EST: The US 2-year yield is at 5.16% and the 10-year 4.82%. The 2-10 spread (yield curve) is -34 bips. 

Note Added 10/18/23, Wednesday, at 3:00 AM EST: The US 2-year yield is at 5.20% and the 10-year 4.85%. The 2-10 spread (yield curve) is -35 bips. Yields are all over the map as the dis-inversion continues.

Note Added 10/18/23, Wednesday, at 10:46 AM EST: The US 2-year yield is at 5.21% and the 10-year 4.90%. The 2-10 spread (yield curve) is -31 bips. The dis-inversion continues.

Note Added 10/19/23, Thursday, at 4:13 AM EST: The US 2-year yield is at 5.24% and the 10-year 4.97%. The 2-10 spread (yield curve) is -27 bips. The dis-inversion continues. Danger Will Robinson. Danger Will Robinson. The yield curve is now only 2 bips away from the -25 bip resistance that will usher-in the US recession full steam ahead. Pope Powell brings the tablets down from On High this afternoon (he is speaking today at the Economic Club of New York where the economists shove the free rubber chicken and rigatoni into their pie-holes while half-listening to the on-stage presenters) and will tell global traders how to trade. Yields will move on Powell's words.

Note Added 10/19/23, Thursday, at 12:25 PM EST: Powell is speaking. He wants to hold fates steady and wait for more data. He complains that 'inflation is too high' sounding like Jimmy McMillan who would say that the 'rent is too damn high'. The US 2-year yield is at 5.24% and the 10-year 4.97%. The 2-10 spread (yield curve) is -25 bips. Houston, we have a problem. The recession versus no recession battle is on the line right now at the -25 bips resistance. A move above signals the all-clear to complete dis-inversion and recession. If the spread is spanked down from -25 bips, the no recession crew will remain correct.

Note Added 10/19/23, Thursday, at 4:22 PM EST: Powell has spoken. The US 2-year yield is at 5.16% and the 10-year 4.99%. The 2-10 spread (yield curve) is -17 bips. Note how the short-end drops in yield and the long-end rises in yield. THE RECESSION CAMP IS PUFFING THEIR CHESTS OUT WARNING YOU THAT THE ECONOMIC TROUBLE IS BEGINNING ON THIS OCTOBER 19TH BLACK MONDAY ANNIVERSARY. THE US YIELD CURVE (2's-10's) IS THE LEAST INVERTED SINCE JULY 2022 15 MONTHS AGO!! Current yields are; 2-year 5.16%, 5-year 4.96%, 10-year 4.99%, 30-year 5.11%. All the ducks are in a row for normalcy except for the 2-year that would need to drop 20 basis points for the yield curve to dis-invert across all durations.

 

Note Added 10/20/23, Friday, at 4:04 AM EST: The US 2-year yield is at 5.15% and the 10-year 4.94%. The 2-10 spread (yield curve) is -21 bips. Current yields are; 2-year 5.15%, 5-year 4.91%, 10-year 4.94%, 30-year 5.07%. The US recession has started but it will not be known in the data for a few weeks or months. The hook pattern on the chart keeps taking out resistance and continues dis-inverting back up to the zero line. The yield curve is the least inverted since July 2022 fifteen months ago! The housing recession has been in play all year long. The manufacturing recession has been ongoing for many months. The labor recession (jobs) started last month. All of you young folks under about 35 years old have never experienced a recession before. Many of you are going to lose your jobs and your lives will change forever. The reason that housing and autos did not throw the US into recession already is that these are no longer the top two signals indicating a significant economic downturn; semiconductors (chips) now rule the roost as the top recession indicator. Concerning the chart above, if you bring up the daily chart for the 2-10 spread, it is in negative divergence. The weekly chart, however, has indicators remaining long and strong. Thus, marrying the two, the yield curve dis-inversion will likely take a break for a few days or week or two, hence the move today from -16 bips to -21 bips, and likely back kiss the -25 bips, but then begin dis-inverting again to satisfy the weekly time frame and full dis-inversion would be expected on the weekly basis going forward (November). The -16 and -17 bips resistance line in the sand is important. As that is taken out to the upside it is further proof that the recession is underway. The rich are keeping the economy afloat and delaying the recession. You must understand that the people involved in markets, and commenting on markets, and writing or podcasting about markets, are the privileged elite or upper middle class (sycophants servicing the wealthy in the crony capitalism system). They are the 30 million Americans that cheerlead the daily data and see no problems ahead for the economy. The other 300 million Americans that were screwed and cheated by America's crony capitalism system over the last five decades are rubbing two nickels together every day to try and make ends meet. These folks, the United States citizens, see nothing but problems and trouble ahead for the economy as they complain daily about inflation. Social unrest and probably violence is Our Destiny especially since the 300 million Americans will want to seek vengeance against the 30 million that raped the financial system for all its worth with the help of the Federal Reserve's money-printing. Payback's a bitch and unfortunately that is ahead for all of us. Read a book on world history and you will understand.

Note Added 10/20/23, Friday, at 8:11 AM EST: The US 2-year yield is at 5.14% and the 10-year 4.97%. The 2-10 spread (yield curve) is -17 bips. Wow. That did not take long. The spread is testing the important -16 to -17 bips resistance.

Note Added 10/20/23, Friday, at 8:30 AM EST: The US 2-year yield is at 5.14% and the 10-year 4.99%. The 2-10 spread (yield curve) dis-inverts to -15 bips. Thump, thump. The wheels just fell off. Only 15 more little bips will completely dis-invert the US yield curve (2's/10's) guaranteeing a US recession going forward.

Note Added 10/21/23, Saturday: The US 2-year yield is at 5.07% and the 10-year 4.91%. The 2-10 spread (yield curve) dis-inverts to -16 bips. The recession and no recession camps are thinking things over this weekend. The no recession group worries about the ongoing yield curve dis-inversion that will ring-in economic trouble.

Note Added 10/23/23, Monday Morning, at 3:15 AM EST: The US 2-year yield is at 5.12% and the 10-year 4.98%. The 2-10 spread (yield curve) dis-inverts to -14 bips. The recession outcome is coming on fast.

Note Added 10/23/23, Monday Morning, at 5:00 AM EST: Whoopsies, daisies. The US 2-year yield is at 5.12% and the 10-year tags 5.00% (highest yield since 2007). The 2-10 spread (yield curve) dis-inverts to -12 bips. Thump, thump. The no recession bandwagon just lost another wheel.

Note Added 10/23/23, Monday Morning, at 5:21 AM EST: The US Treasury yields are; 2-year 5.12%, 5-year 4.93%, 10-year 5.01%, 30-year 5.17%. The 2-10 spread (yield curve) dis-inverts to -11 bips. Only 11 more basis points and the 2's-10's will be completely dis-inverted. The no recession cheerleaders are frantically telling each other not to panic. Don't Panic! The 2's-30's are positive by 5 bips completely dis-inverted. The 5's-30's are positive by 24 bips. The 5's-10's are positive by 8 basis points. The entire yield curve would return to normalcy if the 2-year yield would fall 19 bips. The recession moves from the front yard to the front porch and is now banging on the front door.

Note Added 10/23/23, Monday Afternoon, at 1:30 PM EST: The roller coaster bond market ride continues. The 10-year tags 5% popping to 5.02%, and then falls on its sword. Bond king Bill Gross and hedge fund bigwig Bill Ackman are changing their tune and are now bullish on notes and bonds (expecting bond prices to rise and yields to move lower). After tagging -11 bips this morning, the yield curve re-inverts down to -24 bips at that critical support level. The US 2-year yield is at 5.08% and the 10-year 4.85%. The 2-10 spread (yield curve) is at -24 bips. It is a wild and crazy move down in a heartbeat some say it is due to the yield hitting the round number 5% and others say the Bill's create the tumult. Stupido's. It was the neggie d on the daily chart, jackasses. All you have to do is look at the charts. The no recession bandwagon fixes its wheels and is back on the road again. If the -25 bips support fails, the spread will likely move lower to retest the critical -40 bips support. It has to make a bounce or die decision at this -25 bip level. On the way back up, when the -10 bips gives way to the upside, the zero bound and complete dis-inversion and steepening of the curve will follow; and so will recession. The daily chart for the 2-10 spread is negatively diverged so the pullback is no surprise at all; it was forecasted above. But remember, the chart indicators on the yield curve weekly chart are long and strong wanting the spread to move higher back towards zero and complete dis-inversion on the weekly basis. Thus, the 2-10 spread will chop around for a few days or week or two (to satisfy the negativity on the daily chart) then resume the path higher to complete dis-inversion and US recession on the weekly basis. The yield curve (2-10 spread) should completely dis-invert by Thanksgiving next month. Bill Gross now says recession by the end of the year. He must be reading Keystone's stuff.

Note Added 10/24/23, Tuesday Morning, at 5:25 AM EST: The US Treasury yields are; 2-year 5.07%, 5-year 4.80%, 10-year 4.83%, 30-year 4.96%. The 2-10 spread (yield curve) is at -24 bips continuing to test the critical -25 bips support. The bond market is deliberating a shakedown like Ondara.

Note Added 10/24/23, Tuesday Evening, at 6:00 PM EST: The US 2-year yield is at 5.11% and the 10-year is at 4.82%. The 2-10 spread (yield curve) dis-inverts to -29 bips falling through the -25 bips support. The no recession camp cheers.

Note Added 10/25/23, Wednesday Morning, at 3:30 AM EST: The US 2-year yield is at 5.07% and the 10-year is at 4.85%. The 2-10 spread (yield curve) dis-inverts to -22 bips back above the -25 bips S/R. The recession camp cheers as the -25 bips support holds, for now. The US budget deadline is only 20 days away and the House remains leaderless. Israel will likely start its ground war against the filthy Hamas (Sunni) radical terrorists under the new moon on 11/13/23 so the bloody building-to-building search for the Israeli hostages will begin and be in full force say, 11/10/23 through 11/18/23. Israel has the superior night vision goggles, scopes, equipment and weapons so the attack on the Hamas scum will begin during the darkest overnight period of the month. It all hits the fan early to mid November. 

Note Added 10/25/23, Wednesday Afternoon, at 1:25 PM EST: The US 2-year yield is at 5.12% and the 10-year is at 4.95%. The 2-10 spread (yield curve) dis-inverts to -17 bips remaining above the -25 bips S/R and on its way to test the -11 bips resistance.

Note Added 10/26/23, Thursday Morning, at 3:00 AM EST: The US 2-year yield is at 5.12% and the 10-year is at 4.98%. The 2-10 spread (yield curve) dis-inverts to -14 bips remaining above the -25 bips S/R and on its way to test the -11 bips resistance.

Note Added 11/2/23, Thursday Morning, at 7:12 AM EST: The US 2-year yield is below 5% at 4.94% and the 10-year is at 4.70% after the Fed rate decision and Chairman Powell presser yesterday afternoon. The 2-10 spread (yield curve) dis-inverts to -24 bips retesting the -25 bips support so a bounce or die decision is needed from this level. Israel begins its ground invasion into Gaza in a second phase of the developing war. Surprisingly, oil prices are not that impacted yet. As explained above, the worst of the fighting is likely slated for say, 11/10/23 through 11/18/23 under the waxing and waning new moon. Israeli forces are on the outskirts of Gaza City this morning so the timing is good to set things up and do some backing and filling to get ready to cleanse the city of the Hamas terrorists beginning next week as the overnight period becomes darker and darker.

Note Added 11/2/23, Thursday Evening, at 6:39 PM EST: It died. The US 2-year yield is at 4.99% and the 10-year is at 4.66%. The 2-10 spread (yield curve) dis-inverts to -33 bips falling through the -25 bips support that now becomes resistance. The spread may want to drop to the important -40 bips support for a retest. The no recession camp is happy as the yield curve inverts further proclaiming that an economic slowdown is nowhere in sight. The US Monthly Jobs Report drops tomorrow morning.

Note Added 11/9/23, Thursday Morning, at 7:07 AM EST: The US 2-year yield is at 4.95% and the 10-year is at 4.53%. The 2-10 spread (yield curve) dis-inverts to -42 bips testing the critical -40 bips support. The spread is retesting and will bounce (recession is underway and coming fast) or die (no recession camp keeps winning) from here. This retest determines if the hook pattern fails again for the umpteenth time delaying the recession, or not.