Guys, I really want to talk about the macro and big-picture view I have for the markets right now.
I have strong evidence of the case that’s playing out in front of us… what I expect to see happen for the rest of April going into May… and, most importantly, how to keep our wits about us.
Think of this as a State of Union Address for all of the markets, trading strategies and traders.
This chart is driving everything in the market, and it’s got me waking up at 2 o’clock every morning. That’s because every night, there’s some schmuck in London driving interest rates up via Eurodollar futures.
For those unfamiliar with them, Eurodollar futures are financial futures contracts specific to the Eurodollar, and they’re based on interest rates. That simply means it’s a U.S. dollar on deposit in commercial banks outside the U.S.
And they’ve been manipulating the market by running up interest rates, and the 10-year Treasury.
Remember, higher rates are super bearish for the rest of the market.
Taking a look at the 10-year in comparison to the Nasdaq 100 (QQQ), you can see that rates exploded higher Thursday morning, and the Nasdaq started to tank.
The Nasdaq opened strong — up almost 2% — and then fell from 14,275 to 13,720… one of the biggest intraday reversals to the downside we’ve seen in a long time in a major index.
And that could be just the beginning.
The main thing I see right now is that rates are beginning to come off a bit. It’s still in the early days and not significant enough for people to trust it — which is why the market is still bearish.
But… I discovered something major.
The moving average for the 10-year Treasury is at 2.26%, and we’re at 2.86% right now. I anticipate us coming back down to the 2.6% and 2.5% range in short order.
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