That's going to leave a mark
And the junk rally continues, at the expense of tech. Some charts looking at the pain:
10Y yield continues its ascent. Testing trendline resistance. We think it doesn’t break through yet, but we’ve been wrong before.
Increase in rates, coupled with beginning of year euphoria is pushing markets into cyclicals
Just look at some of the pain inflicted upon the folks who only had to have a pulse and get long tech & duration for the last decade or so.
Long duration vs short duration (sectors)
As go rates, so goes duration (inverted)
A bit belated, and just beginning to call the Fed’s bluff, but it makes sense. Just look at the carnage:
On the long duration vs short duration relative performance, a 3 standard deviation selloff. Ouch.
Check out the divergence between expensive tech (white) and the long value/short secular growth baskets (yellow)
Thinking this is all a bit too much too fast on the whole risk-on trade. Bringing it in some.
Long vs short duration. Expect a bounce after this plummet. Dead cat or not, not interested in playing for a near term continuation.
Same goes for Value vs Growth. Let’s let it come in a bit and see how it looks
Value has enjoyed a nice bounce. 2 sigma for 2 day return
Still watching time spreads as indication for underlying crude price trend. Not especially enthused about this chart
Because timespread momentum drives crude price momentum
Adding downside hedges in DVN, LYB, PSX. Also adding upside in growthy SHW after weakness. Monetizing XOP length from yesterday.
The following charts show normalized performance by equity according to criteria categorized in the chart title
DVN (RSI)
PSX (Z score)
LYB (RSI)
Selling yesterday’s XOP long. Too big of a move, we’re not that good
XOP (RSI)
I’ve had a crush on SHW for some time. Good company, good fundamentals, good growth - so it’s sold off here recently. Adding length.
I don’t normally move things around this much, but big moves do warrant changes. Always ok making less money to lock in gains.
Going to look some into earnings trends this week, but it’s usually an intriguing setup for stocks to rally, into an earnings release, while numbers are coming down