Many times have I mentioned the importance of the bond rally terminating and, ideally, TLT being repelled by its broken trendline. Mercifully, this is precisely what has happened.
Bonds Back Better
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Yield Curve UNDEFEATED! (by LZ)
There’s no need to overcomplicate 2024. There is a single indicator with a perfect track record of recession, correction or bear market: the spread between the 2-year and 10-year yield.
Since everyone is familiar with the spread chart, I’ll show the ratio instead.
Bond Rally Over
Bulls Need the Bonds
The gains in 2023 have been so massive (pretty much triple-digit rises across the board), the bulls sure as hell better hope for QE7 through QE12 in 2024 to keep this simulacrum going. One crucial item they’re going to require is for bonds to NOT respect this trendline. If this red trendline does, in fact, represent resistance, and bonds start falling, it’s going to take away an important part of their narrative.
