Mid-Week Market Review, 8.14.19
The markets are selling off due to news related to the inversion of the yield curve. What happens next will be very interesting.
Historically, the inversion of a yield curve does not signal market correction–at least immediately. According to CNBC, “The market rallies more than 15% on average in the 18 months following the inversion. A recession hits in 22 months after the inversion, according to Credit Suisse. Sequential losses can start to add up after 18 months.” Despite the potential recession, inverted yield curves are not perfect predictors of recessions, so time will tell.
The markets can ill-afford a correction right now. Although the daily charts are not strong, they are at support levels which could result in a nice rally and repair some of the damage on the weekly charts. IF, however, the markets continue to sell-off here, it’ll create further selling and increased volatility due to weekly and monthly chart breakdowns.
We will watch these indicators and time frames very closely in the coming days, weeks, and months.
$TNX $SPY $SPX $QQQ $COMPQ $RUT $IWM $JNK $TIP $TLT $USD $GOLD $GLD $WTIC $MSWORLD $EEM $OIL $VIX $SPY $JJC $XLY $XLP
**Disclaimer** This video is for educational and information purposes only. Please do your own due diligence before determining whether to buy or sell any security.
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