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Created on: 4/10/2023 3:08:22 PM Last Update: 4/10/2023 3:42:21 PM Posted by: RTT
1 POST
The most important data point
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 The largest financial market in the world is the US Bond Market, if this market breaks, it is truly the end of this world. The health of the US bond market matters.
The health of the world's largest market is measured by the MOVE Index.
The MOVE index is defined here:
The MOVE Index measures U.S. interest rate volatility. The index tracks the movement in U.S. Treasury yield volatility implied by the current prices of 1-month OTC options. Created in 1988, MOVE stands for 'Merrill Lynch Option Volatility Estimate' The MOVE index tracks the movement in U.S. Treasury yield volatility.
The thousands of hours of useless analysis on financial TV and YouTube mean nothing when the MOVE index is showing stress.
Bill Clinton's chief strategist James Carville famously said: "I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a . 400 baseball hitter. But now I would want to come back as the bond market.
The MOVE index (red line below) is showing stress when it is above 120, more so if it is above 140, and the market is just broken if it is above 150.
Bond market stress is normally the result of not enough demand for US debt relative to the supply of the debt at the yield on offer (interest rate).
One way to improve demand for US debt is to make it cheaper to buy, and a method to do that is to lower the US dollar. A lower US dollar allows non-US investors to buy US debt cheaper.
Another way to reduce stress is to have less supply debt, that is, cut spending, or increase tax revenue, as this results in less US debt creation in the years ahead.
Another way to reduce stress is to ensure the debt maturity is 5 to 10 years, rather than today, when 80% of US debt is under 3 years.
The chart below shows how the US dollar has been used to release MOVE index stress. Currently, one should assume a lower US dollar is near once the hot inflation narrative story expires to cool bond market stress.
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Changes in the world is the source of all market moves, to catch and ride the change we believe a combination
of Gann Angles,
Cycles,
Wyckoff and
Ney logic
is the best way to ride the change, after all these methods have been used successfully for 70+ years.
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Investing Quote...
..."The average chart reader is apt to become obsessed with the notion that the dips and peaks and primary and secondary movements are all there is to stock speculation. If he pushes his confidence to it’s logical limit he is bound to go broke."...
Jesse Livermore
.."When a dictatorship is a fact. Revolution becomes a right"..
Victor Hugo
.."Wait for that wisest of all counselors, Time"..
Pericles
.."What greater wealth is there than to own your own life and spend it on growing"..
Ayn Rand
.."It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt."..
Mark Twain
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