A storm is brewing in Europe as Yields have been significantly inverted for a while and we also have a distribution sideway channel on the chart.
The bankers like to say that it’s different this time because central banks are buying LT Bonds when necessary, but is it? Well, in the past Yield curve inversion was always a predictor of recession.
This week the US Yields between 10Y-30Y came just 3 bips shy of inverting. And to make this even crazier, the 0Day Options have reach 50% of the S&P500 Options volume. No wonder the equities went nowhere this week oscillating up and down. The Options bubble is very dangerous and right now CTAs are max long US Equities and European Equities indexes. So watch out.
May Fortuna be with you.