Focus shifted away from US10Y with less impact on NQ and Gold
I'd like review the patterns from time to time. Pattern works until it doesn't. On Jan.6th, I wrote the idea titled "US 10Y jumped by 5+% A dangerous sign for stocks". I was concerned of the speed. One month later, stock market started to fell drastically mainly due to this factor.
What I observed for the past few days is that the pattern may not work again. The correlation seemed to turn from negative to positive. From the chart, I can see that NQ, Gold and Treasury yield moved in the same direction since March the 8th. People may wonder why. Frankly speaking, I have no clue, maybe, investors shift the focus on something else, e.g. corporate tax hike, tensions between US and China.
The reason doesn't matter at all. What matters is how we are going to do. We should identify the certainties among the uncertainties.
Personally, the certain things are: 1) Economy is on its way to pre-pandemic normal. 2) Strong dollar. 3) Fed will raise its target rate sometime in the future, e.g. late 2022 or 2023, depending the CPI data.
So, I'm bullish on value stocks(banks, real estate) as well as USD pairs. Crude oil may hit 75 or even higher level. I'm bearish on gold until inflation reaches 3.5% or higher. Neutral strategy may work as well(check my BABA/Bidu strategy in the linked idea below)
Feel free to share your thoughts. Give me a like and follow if you think it's useful.
What I observed for the past few days is that the pattern may not work again. The correlation seemed to turn from negative to positive. From the chart, I can see that NQ, Gold and Treasury yield moved in the same direction since March the 8th. People may wonder why. Frankly speaking, I have no clue, maybe, investors shift the focus on something else, e.g. corporate tax hike, tensions between US and China.
The reason doesn't matter at all. What matters is how we are going to do. We should identify the certainties among the uncertainties.
Personally, the certain things are: 1) Economy is on its way to pre-pandemic normal. 2) Strong dollar. 3) Fed will raise its target rate sometime in the future, e.g. late 2022 or 2023, depending the CPI data.
So, I'm bullish on value stocks(banks, real estate) as well as USD pairs. Crude oil may hit 75 or even higher level. I'm bearish on gold until inflation reaches 3.5% or higher. Neutral strategy may work as well(check my BABA/Bidu strategy in the linked idea below)
Feel free to share your thoughts. Give me a like and follow if you think it's useful.
plan your trade and trade your plan
