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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
WARNING: This entry is 1067 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.
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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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NOTE: Posts here are the lite version, more depth on each subject can be found via our RTT Plus membership.
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...
...“My satisfaction always came from beating the market, solving the puzzle. The money was the reward, but it was not the main reason I loved the market. The stock market is the greatest, most complex puzzle ever invented – and it pays the biggest jackpot…it was never the money that drove me. It was the game, solving the puzzle, beating the market that had confused and confounded the greatest minds in history. For me, that passion, the juice, the exhilaration was in beating the game, a game that was a living dynamic riddle"..
Jesse Livermore
..The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell"..
John Templeton
.."Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway"..
Warren Buffett
...“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”...
Martin Zweig (The inspiration behind a number of Martin Zweig’s methods came, from Jesse Livermore).
.."Just because you’re taught that something’s right and everyone believes it’s right, it don’t make it right."..
Mark Twain
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We at readtheticker.com hold the view that a mix of stock chart technical analysis, Richard Wyckoff, William Gann and Jim Hurst methods plus market fundamentals allows the investor to formulate a very sound market opinion. These attributes are mutually inclusive and must be weighted equally before investing or trading in any Stock, ETF, Currency, Bond, Commodity, CFD or Mutual Fund
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