Some monumental moves in two major assets classes today while equities consolidated yesterday's gains.
USD Index (DXY):
A confirmation of the change of the trend taking place here with a close below the 200 day moving average.
This is the first time in 18 months that the DXY has closed below its 200 day moving average, as the chart below demonstrates.
And to further lob a flaming bag of fresh turds at the doorstep of every bear out there, yields were also pummeled today in poetic fashion:
I highlighted the importance of the trend break for yields when it occurred during Thanksgiving week.
What we have now are layers upon layers of confirmation that the inflation trade is disintegrating before our eyes.
Not only will equities continue to respond to this by moving up towards 4500 on the SPX by year end, but Powell will also be responding by laying off the rate hikes past February, at the absolute latest.
The game has changed. Make sure you're changing with it.
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