The Pigs are not leading yields

Bank sector negatively diverges long-term yields

As long-term yields rise to tick the 2.5% to 2.7% target zone on the 30yr, the Bank sector seems to have other ideas. Like maybe yields are not going to keep rising. Like maybe there is a reason why the Fed is so hesitant to make like a hawk.

Nominal KBE is lame and its ratio to the broad market (SPY) is suspect. This with long-term yields (usually a positive for the pigs) at/near target and still in pure uptrends.

Of course the tanking yield curve may have something to do with it as well. If you’ve read the headlines there are recession fretters out there aplenty worried about the ongoing (re) flattener. The old saying goes that the pigs borrow short and lend long. If that is still how the banks operate this chart says it’s getting tight out there for their bottom lines, which may be another reason the damn Fed is sitting there like a dovish lump on a log.

Interesting market. I love this market simply because it is so challenging to analyze and figure out.

For “best of breed” top down analysis of all major markets, subscribe to NFTRH Premium, which includes an in-depth weekly market report, detailed market updates and NFTRH+ dynamic updates and chart/trade setup ideas. Subscribe by PayPal or credit card using a button on the right sidebar (if using a mobile device you may need to scroll down) or see other options. Keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar. Follow via Twitter @NFTRHgt.

Testimonials

Gary

NFTRH.com