Below is the opening segment of this week's edition of Notes From the Rabbit Hole (NFTRH 246). My friend’s request for a 'simple' road map ended up a bit wordy, but I think the chain is logical.
Mail from a friend: "I think your taper-to-carry idea has legs, but I’d really appreciate it if you went over the basic theory and how you see the dots connecting, if you decide there’s space and time in this weekend's edition at least. What I’d really want is a simple road map, the logical chain if you will. Nothing fancy, just the way it may (repeat may) play out and what its consequences might be."
When this request came in I had already been thinking about trying to put this all together in a logical sequence since 'T2C' was graduated to an actual plan from a thesis last week.
The idea was first introduced in NFTRH 241 on June 2, which was the week that the BKX-SPX ratio broke out to the upside and long-term Treasury bond yields broke up from bottoming patterns. In the ensuing 5 weeks the macro fundamentals and technicals have only become firmer in support of T2C. Continue reading "Taper to Carry … a Logical Chain"