Monday at 00.00 the markets will open for the most important week this year, with DOW, SP500 and the 10 YEAR BONDS. The bond market will decide how these indexes will perform. The 10 year notes movement shows exactly where interest rates are going. Here the monthly, weekly and daily trends are down and just above the breaking down point in the day chart. A new wave on downside means higher interest rates as I said. This break could come already on Monday.
Interest rates was at 1 percent 1950. 21 percent 1982 and has since gone down until one year ago to the low of 1,4 percent. This 30 yr down trend has been broken on upside and we had a new high last Friday close at 2,83 percent A one percent increase in rates means that for instance home owners with a 300.000 mortgage will pay 3.000 more per year. The whole economy will immediately feel the impact of higher rates. That is why the stock markets react negatively to any increase. For 30 years bond prices have risen and Japan, China, the worlds insurance companies etc has been buying US bonds. Now that party is over. Last week several countries sold US bonds. Can you imagine what will happen when there are only sellers and no buyers. Interest rates will skyrocket and the stock markets collapse. This is the reason I am expecting DOW to go from 15.600 to 5.000. It is just a matter of timing. That is what I am doing every day - to find out when.
Interest rates was at 1 percent 1950. 21 percent 1982 and has since gone down until one year ago to the low of 1,4 percent. This 30 yr down trend has been broken on upside and we had a new high last Friday close at 2,83 percent A one percent increase in rates means that for instance home owners with a 300.000 mortgage will pay 3.000 more per year. The whole economy will immediately feel the impact of higher rates. That is why the stock markets react negatively to any increase. For 30 years bond prices have risen and Japan, China, the worlds insurance companies etc has been buying US bonds. Now that party is over. Last week several countries sold US bonds. Can you imagine what will happen when there are only sellers and no buyers. Interest rates will skyrocket and the stock markets collapse. This is the reason I am expecting DOW to go from 15.600 to 5.000. It is just a matter of timing. That is what I am doing every day - to find out when.
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