This 1838th edition of Short-term Trading with Oscar Carboni is for the trading Friday, Rocktober 5th 2018. Why do I call October Rocktober? It’s going to be a rocky month so it can be a little slippery as the price of crude is going to change this market’s mood. Also, bonds are making new lows which makes interest rates make new highs. This ultimately makes it difficult for companies that have to pay more money for dividends sell their corporate bonds.
Repricing and not a Topping Pattern
What you are seeing here (refer to the graph above) is not a topping pattern but this is the repricing of the stock market. Why? Because we just had an interest rate spike. Not only did the Federal raise rates, but that’s also normalized, and the traders came out and sold bonds like crazy. So, the rates went up quickly, literally spiked up on the graphs.
If you don’t know how it works, corporations have to offer more interest for you to buy their bonds instead of buying US bonds which are backed by the US and insured. [Read more…] about Bond targets forcing a repricing of stock indices 10/03/2018