hello,
In recent times, the topic about U.S. bond Yield occurs quite often due to increased activity of the Fed. I mean of course start the tapering.
Moreover, the Yield can now be associated with the American stock exchange, where we see new highs and attempt to answer the question of whether cutting QE will end the boom or can only possibly lead to short-medium correction.
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| chart 1. SP500 Index |
Looking at the major "summits" of the SP500 Index, which were created in 2000 (point 1) and 2007 (point 2) I saw a recurrent pattern of the yield curve of U.S. bonds. Well, in both cases, short-term yields overlap with long-term yields, announcing a reversal of the trend on Wall Street.
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| chart 2. yellow line yield curve in 2000, green line today |
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| chart 3. yellow line yield curve in 2007, green line today |
Currently, the yield curve is very far from it, in order to achieve short-term yields levels of long-term and what's more, after the decision of the Fed short-term yield fell even more, supporting the current upsurge.
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| chart 4. yellow line yield curve week ago, green line today |
Therefore the upward trend is not threatened at the moment, but in the near future I would expect medium correction. An important level, according to my analysis seems to be the level of 1830 points, where according the long term picture is a good chance to start a correction. For more information directly on the chart below.
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| chart 5. fSP500 Index H4, 2013-12-22 |
regards,
oscarjp
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