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Thursday, September 3, 2020

Different market sectors are in distortions now.

 US treasury market

The US treasury prices have been trending up because the yields have been falling.  The yield has an inverse relationship to its bond price.

S&P vs VIX chart
The S&P and VIX should also have an inverse relationship but the S&P and VIX moved in sync (Trending up) recently which was abnormal.

The US properties, MBS, CMBS and car resale markets are also distorted now.

http://sg-stock.blogspot.com/2020/08/market-distortions-are-precursors-of.html

In a nutshell, the US treasury prices, S&P and VIX shouldn't be moving in sync (trending up) simultaneously because there will be asset reallocations when the risks are higher.  The US FED has disrupted all these markets!

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