4/5/22 The Yield Curve Inversion & Elon Buys Twitter

News:

Markets posted a strong green day on Monday. The Nasdaq led the charge to close up 1.9%. The other indexes were green but gained less than 1% each.

The stock of the day was Twitter (TWTR^). An SEC filing revealed Elon Musk bought ~9% stake in the social media platform. He’s been critical of the platform in recent weeks. TWTR stock closed up 27%.

To our knowledge, this is only the second investment he has in a publicly-traded company. Tesla (TSLA^) is the other. Musk is now Twitter’s biggest shareholder. Other investments of his that we are aware of are in “Bitcoin, Ethereum & Doge[coin]. That’s it.” I also own some of each.

Worth noting that TSLA stock rose 5.6% yesterday.

Other leading stories are the war in Ukraine and the inverted yield curve. I’ll address that next…

Technicals:

On Friday 2-year bonds trader higher than 10-year bonds.

Typically long-term bonds pay a higher rate. When the opposite is true, the yield curve inverts, it can indicate that the winds are changing.

The past nine recessions were preceded by a yield curve inversion between the 2 and 10-year bonds.

But each recession came 6 to 24 months after the inversion. And there is no direct cause and effect.

Consider this, in August 2019 an inversion occurred. About 6 months later the Covid recession hit. Did the inversion predict Covid? No, absolutely not.

In 1965 the yield curve inverted and there was no recession.

With only a few data points to go on it’s worth noting the inversion occurred but don’t tie all your hopes and dreams to this one technical indicator.

Timing:

April is historically bullish, so far it’s not disappointed.

My outlook remains positive, the current rally could carry on through the summer.

More new positions are noted below…

Watchlist:

*Low Float
^Open Position

*IMTE has resistance at $35
^*SGLY profit target is $16
^NEXT has resistance at $7
PPGH is on watch
NRGV has support at $18
^ASRT has support at $3
SGML has support at $15
^GME has support at $160
BORR is on watch
^LXU has support at $22
^GLNG has resistance at $25
BRCC has support at $22
SBS is on watch
^TELL has support at $6
KOS is on watch
TWTR is on watch

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