Introduction NOTE : Subsequent to this research note, we also launched an SP-500 Probability Model that measured probability of market tops (peaks). The MARKET-TOP probability model uses the inverse logic of the MARKET-BOTTOM probability model discussed in this research note. In other words, we look at low volatility instead of high volatility from the VIX component, we look at gains instead of drawdowns, consecutive up-weeks instead of consecutive down weeks, we look at duration of rally as opposed to duration […]
Archive | August, 2019
Yield Curve inversion suggests mild recession
There has been acute interest in the inversions currently taking place on the term-spreads around the world: And this comes as no surprise, since more than half of the world’s sovereign yield curves have now inverted… Right now, 70% of the U.S yield-curve cluster comprising the 10/5/3/2/1 year bond yields are inverted as shown below. In prior research we have advocated using greater than the 60% threshold to have a “guaranteed lock-in” of the inversion: A closer inspection shows that […]
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