• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Fresh Look at Long Bonds
Stock

Fresh Look at Long Bonds

by September 14, 2023
by September 14, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

I doubt any of our readers are too surprised by the CPI reading coming in a bit hotter than expected.

The bulk of it was in energy costs. Food costs were, mixed with bread and meat, up, while eggs and milk were down. Services inflation was up slightly, while shelter costs were down slightly. All in all, without some black swan event, we can begin to look for normalization of interest rates to core inflation.

Most economists and analysts believe that the federal-funds effective rate target will hold steady at its current range of 5.25% to 5.50% With core inflation close to the current fed funds rate, many economists are talking about a normalization, or a point where the rates are high enough to control inflation. If that is true, it seems to us that the public will have to switch the mindset from rate cuts to rate pause at around 5%, as this is more in line with a healthier economy.

As long as the S&P 500 outperforms long bonds (TLT), risk is on.

Was there damage from the rapid rise in rates? Sure. Nonetheless, we do not want rates much lower — nor do we want them higher. What we want is a long duration at the current levels of inflation and interest rates, with no surprises.

Of course, that is the rub. No surprise means wage inflation and strikes, geopolitics, BRICS, mother nature, trade wars and so on all must behave. This is why we are monitoring the TLTs so carefully, especially as they perform against the benchmark.

Our Leadership indicator shows TLT still underperforming the SPY. Our Real Motion indicator shows a mean reversion in momentum that happened in late to mid-August. Interestingly, it corresponded with a bottom in the TLT, which, to date, is holding up. The momentum phase is bearish along with price.

We want to see the momentum and price flatline, neither spiking higher nor going lower from here.

On price, the July 6-month calendar range low is well overhead at 98.80. Ideally, to see a good rally in the indices, we want that normalization. But we don’t always get what we want, right?

Maybe the Fed has…

And maybe this is the calm before the storm.

This is for educational purposes only. Trading comes with risk.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

If you find it difficult to execute the MarketGauge strategies or would like to explore how we can do it for you, please email Ben Scheibe at Benny@MGAMLLC.com.

“I grew my money tree and so can you!” – Mish Schneider

Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish discusses AAPL in the wake of the iPhone 15 announcement on Business First AM.

Mish explains how to follow the numbers in oil, gas, gold, indices, and the dollar daytrading the CPI in this video from CMC Markets.

Mish talks commodities, and how growth could fall while raw materials could run after CPI, in this appearance on BNN Bloomberg.

In this appearance on Fox Business’ Making Money with Charles Payne, Mish and Charles discuss the normalization of rates and the benefit, plus stocks/ETFs to buy.

Mish chats about sugar, geopolitics, social unrest and inflation in this video from CNBC Asia.

Mish talks inflation that could lead to recession on Singapore Breakfast Radio.

Coming Up:

September 14: Mario Nawfal Twitter Spaces

October 29-31: The Money Show

ETF Summary

S&P 500 (SPY): 440 support, 458 resistance.Russell 2000 (IWM): 185 pivotal, 180 support.Dow (DIA): 347 pivotal.Nasdaq (QQQ): 363 support, over 375 looks better.Regional banks (KRE): 44 pivotal.Semiconductors (SMH): 150-161 range to watch.Transportation (IYT): Needs to get back over 247 to look healthier.Biotechnology (IBB): Compression between 124-130.Retail (XRT): 62.90, the July calendar range low, broke down, along with IYT — 2 negative signs and an indication of stress on the consumer.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

You Might Also Like
  • Still BULLISH NVDA Despite DeepSeek?
  • Top Ten Charts to Watch for February 2024
  • The Ord Oracle November 21, 2023
  • Stock Market Regains Bullish Edge: Can Geopolitical Tensions Change Its Direction?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
New Mexico Democrat governor’s sweeping gun order hits major temporary roadblock
next post
Sector Rotation Analysis Still Quite Bullish

You may also like

Useful Directional Indicator Criteria for Your Success as a Trader!

December 7, 2023

MarketCarpet Report: Stock Market Remains Resilient With Dow Notching a...

August 30, 2024

How to Spot a Hedge Fund Trap: MicroStrategy’s Dramatic Plunge

September 4, 2024

New Tables Show That Intermediate-Term Overview Is Negative

September 28, 2023

Why Homebuilder Stocks are on Fire Right Now!

July 18, 2024

5 New Year’s Resolutions to Transform Your Financial Well-Being in...

December 27, 2024

Real-Time Options Strategies on Your ChartLists? Yes, Please!

April 25, 2025

Get Paid to Buy Your Favorite Stocks Using This Options...

April 2, 2025

Top 10 July 2025 Stock Picks You Shouldn’t Miss

July 1, 2025

What’s Really Driving Tesla’s Surprising Stock Surge?

April 24, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters renovation

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025
    • OpenAI to release web browser in challenge to Google Chrome

      July 10, 2025
    • Sports executive charged with bid-rigging in Texas arena project

      July 10, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,631 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,919 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,607 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,577 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,449 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • White House accuses Powell of mismanaging Federal Reserve, citing headquarters...

      July 10, 2025
    • Italian chocolate giant Ferrero to buy Kellogg’s Froot Loops maker

      July 10, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,171)
    • Investing (538)
    • Stock (2,662)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Top 10 Charts to Watch, September...

    September 5, 2023

    MarketGauge’s Market Beat Rarely Misses a...

    August 23, 2023

    Growth Stocks Roar Into The New...

    February 4, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here