During the early stages of a yield curve reinversion, equities usually rally like we saw in 2008
Bonds are reinverting, which is a signal for a possible future crash. When bonds bottom, it takes an average of about 200 days for a crash to come.
In this bear market, stage 1 started in November 2021. Bonds are a great indicator of where we are on the market cycle, and we were at a peak then.
Understandingly, the sentiment is very bearish. We have wars, rumors of World War 3, high inflation, and high interest rates. Usually, the market is contrarian.
The market is looking long-term bearish, medium-term bearish, and short-term bearish. Why? Let’s dive into our analysis.
The correlation between equities and the balance sheet is strong. The balance sheet is going straight down and is showing no signs of possible relief.
