Earlier we noted the yield curve spiking from deeply inverted to less inverted. That will be a big time negative signal if it continues and starts to steepen in earnest. Meanwhile, another indicator is starting to get peppy.
High yield spreads are starting to lift off and that is not positive. Indeed, it has me questioning why I added QQQ for a trade today *, although if I am going to add anything that is not a gold stock it will probably be Tech related for the reasons brought forward to date.
But we are looking to change the macro, and a steepening yield curve and rising HY spread would pretty much do it. As a side note, my TEI (global income) position got croaked today. I am not going to tolerate much negativity from the long side even as I am not really prepared to short until the market loses the equivalent of the SPX December low.
Meanwhile, I think the rotation into Tech is the machines reading NFTRH. Just kidding, but I don’t trust the machines. Once they start rotating they could also rotate right out the door when they get the memo of the bear’s resumption. Interesting, fun and dangerous market all at once, IMO.
* I actually know exactly why I bought it. The daily chart and the intact Goldilocks view. But in this environment I will not let more items have leeway as I did w/ DVAX and TEI.
