Model Signal Alert
October 24, 2023
Quite a turnaround yesterday after what looked like to be a gloomy start to the week. As outlined in yesterday’s ATW, the reversal window was in force for equities, and we just needed a trigger to ignite it. This was found in the strong rebound in rates markets intr-day. As I also highlighted, multi-standard-deviation moves on curves usually indicate an exhaustion signal. People pointing to Ackman and Bill Gross as the catalyst can not be taken seriously. Bonds don’t turn on opinions. This move was more technical than anything else.
The US 10-year had a decent bounce after falling below Friday’s close in early Monday trading. Candle patterns alone would indicate a bounce towards the 20 ema line as a good possibility. Don’t get carried away, though, as the trend is still very much negative for now.
Meanwhile, the US 2-10s curve flattened back slightly, giving equities another boost.
As mentioned above, equities (ES & NQ) had a flashing reversal zone, indicative of an imminent bounce.
NQ even tagged the 200 ema, with a reversal zone also opening up.
Gold just had the best two-week run in three years, and CTAs are now diving in. With rates not working as a risk-off hedge, gold has been one of the best places to hide, along with USD and CHF. How far can we go?
Let’s look at what else has been flashing overnight. If you want timely updates on a bank of 100+ assets, consider joining the pack.