Technical Breakouts in the S&P 500, Treasury Bonds, Retail Stocks, and Bitcoin

Published on
February 11th, 2021
Duration
25 minutes

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Technical Breakouts in the S&P 500, Treasury Bonds, Retail Stocks, and Bitcoin

Daily Briefing ·
Featuring Katie Stockton and Ed Harrison

Published on: February 11th, 2021 • Duration: 25 minutes

Real Vision managing editor Ed Harrison hosts Katie Stockton, founder and managing partner at Fairlead Strategies LLC, to make sense of recent price action in stocks, bonds, and crypto. Stockton spots key technical signals on the S&P 500 and the S&P Retail ETF ($XRT) and gauges levels of support and resistance in Bitcoin, where the price has shot well above its 50 day moving average, and the U.S. 10 Year Treasury yield, which Stockton estimates is forming a breakout pattern.

Comments

Transcript

  • DG
    David G.
    12 February 2021 @ 07:33
    Hey Ed and Katie. I watched a lot of law and order as a kid. My mom loved the show. The character Lennie Briscoe used to say the greatest one liners. He once said something that I would never forget, "some things are too coincidental to be a coincidence." I Have looked at a lot of charts, and this discussion caused me to take a very close look at the 10 year. I've never seen a chart so perfectly respect a MA as well as the 10 year has respected its 200 month MA over the last 20 years. It's like as soon as yields reach their 200 month declining MA, ten year bonds get bought up, and bad things seem to happen not too long after. Nothing about that seems organic, hence the Lenny Briscoe quote. Ed, you closed out this video saying, "only time will tell how far we can go up from there." lets talk about it. Raoul, while talking to Alex Gurevich, questioned, "Yeah, just as long as it doesn't go too far. If the 10-year goes to 3%, it's probably an issue, or is it not?" What are the odds that a person who gets to have privileged conversations with whales and powerful people mentioning a percent on the 10 year that just happens to be right on the other side of the extended 200 month MA, while we are here discussing 1%, plus or minus 10 to 50 basis points? I don't think Alex picked up on why Raoul mentioned 3%, but I don't think it had anything to do with 2014 and the zero bound, because, "some things are too coincidental to be a coincidence!" I imagine the 200 month MA on the 10 year would be a good place to buy bonds until proven otherwise, in terms of longer term trades. Jerry Orbach RIP
    • AM
      Alonso M.
      16 February 2021 @ 15:18
      A great Briscoe quote. That 200 month declining MA reminds me of the ludic fallacy Nassim Taleb talks about. Flip a coin 99 times and get heads each time. Then flip it again. What's the probability of it coming up heads for the 100th time in a row? The statistician will say 50%. Taleb's character Fat Tony will say 1%. The real probability is probably 0%...because the coin is rigged.
  • SG
    Sebastien G.
    12 February 2021 @ 16:08
    I have basic TA knowledge and use it daily in my work. This is the type of analysis I do myself (MA & basic support/resistance). It is too basic.
    • RS
      Rajwinder S.
      14 February 2021 @ 22:19
      Often basics are all that matter.
    • PC
      Paul C.
      16 February 2021 @ 11:21
      Find what works for you. Too many indicators can leave you with the dreaded ‘analysis paralysis’, as rarely will they all give you the same signal.
  • AP
    Aneil P.
    14 February 2021 @ 00:51
    Do that on Bitcoin and you will end up loosing a lot of SATs to Federal government on short term taxes. The conundrum is you sell BTC's to fiat which is inferior currency and then you pay taxes for making that horrendous decision. No thank you. Keeping our SATS.
  • SU
    Shakeel U.
    14 February 2021 @ 00:31
    RV can you please bring Kate Stockton back once every two years.
  • JR
    Jack R.
    13 February 2021 @ 22:02
    Clear. Concise. Keep it simple and well done.
  • NL
    Nikola L.
    13 February 2021 @ 10:52
    Interesting view. Ed you should have added 30min extra. I am sure there were few more questions in them charts. I am with C K. on this point. One question that is on my mind now is if 10Y hits 1.5% (assume nominal) does that mean market is pricing ~2.5% inflation or still ~2%? This will have major impact on where 10Y real rate will be and price of gold. But most importantly how far markets will fall.
  • CK
    C K.
    12 February 2021 @ 11:04
    I don’t get the criticisms of Katie and TA in the comments. We’ve spent nearly a year discussing how fundamentals no longer matter, and that the market is driven by flows and momentum, so what’s wrong with looking at TA? The issue with TA is that it is simple enough for every man and their dog to do it on their youtube channel but it doesn't mean that there's no value in listening the likes of Katie, Peter Brandt, Frank Cappelleri, and Mish Schneider. If anything, they cover more markets than I have time to, or may look at ratios or indicators that I haven’t thought of, so may alert me to situations that are currently developing in certain assets that I would otherwise miss. And TA isn’t just about clouds and trend lines - macro and TA go hand in hand. See Roger's (I believe) chart of the S&P:EM ratio plotted against the DXY. Sure, it doesn't compare to the level of research that goes into Lyn Alden's views but the two are not mutually exclusive. Guests on RV have been arguing for months whether we're in an inflationary or deflationary environment - it feels like the longest point in a tennis match. Yet TA can tell you something as simple as the: S&P has hit long term support, which coincided with the 100 MA, and has bounced back so chances are we're going for a reversal with a potential retest. Go long now, or wait for retest if you're risk averse and put your stop loss under the support level. You might hit your stop loss or you might be in for a nice long ride and make money whether QA is inflationary or deflationary or, frankly, who cares. When Raoul posts a video saying there is risk of a market crash at the end of Jan, he gets 2277 likes and (I guess) the volume of the 3500 March Puts spikes. When Katie says that Bitcoin has had quite a run recently and it's pretty extended compared to its MA, so it may retest it as it often does (either by dropping to the MA or moving side-ways until the MA climbs), people mock her and say that she's forgotten her crystal ball. Even Raoul says that Bitcoin can correct 50-80% and Lyn Alden, who is also very bullish based on her on chain analysis, said that it had quite a run and some people, depending on their risk appetite, should consider rebalancing their BTC position in their portfolio. What's wrong with having the macro (Raoul), fundamental (Lyn) and technical (Katie) view come together? Also, perhaps her crystal ball was just hidden from view. The problem with this video is that it was too short, in comparison to the recent 45-50 min RVDBs. Please bring Katie back for an RV Plus. Whoever isn't interested can skip it.
    • EH
      Edward H. | Real Vision
      12 February 2021 @ 13:28
      Thanks C.K. I agree with the thrust of your comments. Also notice that Katie talked about the 10-year testing resistance at 1.1425. And she also said that two consecutive Friday closes above that level is a signal to watch for confirmation that it is moving to the top of the range. If we are above that level when the market closes this afternoon, that signal could mean we’re headed to 1.50%. I take that seriously because it could rebound negatively on equities, which are extended.
    • LK
      L K.
      12 February 2021 @ 15:31
      I'm in CK's camp too. While I subscribe for mainly for the fundamental analysis, TA can be complimentary for spotting trend changes and overbought/oversold conditions, as well as planning entries and exits. I'm also quite partial to the Ichimoku system but have never used it on bond yields, so that was quite interesting to see.
    • JS
      John S.
      12 February 2021 @ 22:26
      To say that what Peter Brandt does is simple- sorry to say but what Peter Brandt does is all but simple. Contrarily, he is spot on on the figures behind the charts and the psychology. One of the best part of RV Plus is that Peter Brandt is there from time to time.
    • NI
      Nate I.
      13 February 2021 @ 04:06
      Managing market risks requires a multidimensional framework. Price is just one of several input factors and I wouldn't even give it the biggest weighting. To be the best informed volume in a trade, you need much more than the surface area of price - especially on a shorter term basis. It's hard and so is the math.
  • PE
    Paul E.
    12 February 2021 @ 17:34
    Ed, you always ask the right questions to bring out the most from your guests. Thanks!
  • JP
    John P.
    12 February 2021 @ 03:48
    I don't always agree with Katie Stockton but it's nice to hear her opinion. Back in 2020, i think it was around June 11th, she came on RV and said that the recent sell off of the prior day was not a lower high bear market rally but a temporary pull back from an uptrend that would continue through out the year. At the time I thought it was a crazy opinion given the economic damage. I was wrong. Her technical analysis did in fact forecast that value doesn't matter and would continue not to matter for much longer.
  • MB
    Mike B.
    12 February 2021 @ 03:28
    Kind of a nothing burger here.
  • JR
    Jaymes R.
    12 February 2021 @ 02:47
    I thought this was solid. Thanks guys.
  • CM
    Cory M.
    12 February 2021 @ 01:18
    I look to RV for the "macro confabulations." If you MUST have TA, please limit it to Tuesdays. TA requires no education and little thinking. It's automatic, lazy and unchallenging. (Peter Brandt can have a pass.).
  • RT
    Robert T.
    11 February 2021 @ 23:44
    TLDW: Non-risk taker, who charges clients $2000 a year, talks about very basic technical analysis for 24 minutes
    • CL
      Carlos L.
      12 February 2021 @ 00:09
      Sorry seems she forgot her crystal ball.
  • JS
    John S.
    11 February 2021 @ 23:40
    Bring Katie back to RV Plus :) She nails technicals like none