Credit Flow Investor

So next week likely to be up and this week…

Bonds like the rate rise….and bad news will be good for them…

VIX continues to rise….In May, it was falling.

With 1 rate increase, chance for another is only 50-50..

And SPY not doing well….

Gas also rising

Vix looks the same as end of January.

ROC20 now positive after bottoming near 14…

VIX can be used in the ‘context’ of other indicators such as

bonds being oversold, SPY near highs and Diesel up +58%.

Think of it simply as SPY+GAS at the highs and Bonds at the lows!

AND KW wants inflation to come down which requires a hiccup.

The market is becoming nervous as seen through VIX…

Link…

https://fred.stlouisfed.org/graph/?g=1YxRj

Most of the time these time indicators don’t matter.

BUT when there’s a squeeze or a ‘play’ happening they can be very useful.

CPI day (last Friday for example)

CPI week (bonds down the entire week)

Fed week or the week of the Fed meeting

OR

the week after the Fed meeting

Fed minutes’ week (minutes come out on Wednesday 3 weeks after the meeting)

The last week of the month after a drop.

I also believe there will be no drop in December.

BUT commodities will fall anyway for 3 months (Oct-Dec).

bonds now oversold on weekly….

1. SPY RSI is only 56 so no threat from stocks (YoY +20%)
2. Fed leaves rates unchanged and –ve QE which is good for bonds (last year they were dropping rates)
3. 3 months more are needed for KW to meet inflation targets 2.4 and interest rates 3.1
4. 6 month down cycle for bonds is ending (deeply oversold)