Yield curve (Yield curve wiki) is broadly perceived as a leading economic indicator.Specifically an inverted/flat curve has signaled many times since 1970 a market top and a subsequent recession
The above chart shows the difference between 10-year yield and 2-year yield.A zero or negative reading means a flat or inverted yield curve respectively.During 2000 top and near 2007 top of equities market the difference was zero to negative, signaling a market top.
As we can see from the above chart, 2-year yield is in a steep rising channel, when 10-year yield is in a descending channel.A projection of these two channels shows a convergence of them (a.k.a a flattened yield curve, a.k.a an equities market top) in 2017.
Will 2016 be another painful year for bears or this time will be different?
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