There are short-term, medium, and long-term trends, but these are all usually inside a half a year for most trend-followers; nevertheless, it is good to focus on the very long-term to get a sense of the regimes that dominate the market view. If you look at trends over the last few decades, you will the great upward move of the 70’s and the 40+ year downtrend. The shorter-term cyclical credit trends show rates going up only with the market being hit with crisis which causes a reversal. Each shorter-term peak is at a lower high, but the chart is not the end of the story because we have not included the added two year period to November 2024. Look at the current level of 4.30 is way outside what anyone was thinking given the long trade. The last two years has been the great bond yield breakout and is nothing like we have seen in terms of a reversal of the bond channel. Discussion should always start with the new world bond view.
No comments:
Post a Comment