2 key market indicators to watchout

An interview transcript with Money FM 89.3 on 21 May 18: Ryan: Since you joined our programme, you have been adopting a defensive play, any reason for that? There are 4 stages in a bull market, let us try to identify which stage we are in today: Stage 1 - Bull markets are born on pessimism Stage 2 - It has grown on scepticism Stage 3 - mature on optimism Stage 4 - and die on euphoria I do not think we are at the stage 1 and 2 right now, we are likely in a mature one and I will continue to observe if the global “sold-off” in February this year is a reaction to euphoric bull. There is time and season for everything, and usually after and a major sell-off and especially when the market started

Why above 3% for 10 years yield is a concern?

Why all eyes are on the 10 years treasuries? Why not on the 2 years or the 30 years? This is because the US 10-year note is used generally as a benchmark to set as a borrowing cost for mortgage rate worldwide. Many analysed that the 10 years treasuries yield has broken above the high at 3.03% set in 2013, and it is a psychological level. I believe it is not just that, but it has also broken the last 37 years of this downtrend. Drawing trend-line can be subjective, some will take the recent high achieved this year as the new peak and continue to project this trend downwards. Therefore it is also important to track the historical data and to reference to the fundamental developments as well. A

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