We are likely headed into a recession !

The fake poke !

When the 10-year yields made a monthly close above the long term channel from 1982 (back in June 06), i was convinced that we were entering into an inflationary environment. Boy, was i wrong ! That was a massive headfake. Now that we have reverted back into the channel, it's sending a powerful message that we are likely headed into a recession. Nothing is gauranteed in the markets. But when the markets send out powerful signals, we just gotta listen or endure financial ruin. If T-Notes breakout above 108.75, then the yield curve inversion would steepen beyond any economy bulls' threshold level. Is the economy strong now ? You bet !. Was the economy strong in the spring of 2000 ? You bet !

What does this mean to the equities ? Well, i don't like mixing market analysis. Right now it's ST bearish and IT bullish for equities. That could all change. I will update if and when any major IT pivots get broken. Stay tuned....