Posts Tagged ‘EU stability pact’

Notes From Underground: Examining the Theoretical Premise of Notes From Underground

March 6, 2012

ABSTRACT: A theoretical view of NOTES FROM UNDERGROUND is that the initial action of a flattening yield curve is BULLISH, or, most importantly, not BEARISH for a developed market currency for it signifies that a CENTRAL BANK is ahead of the inflation curve and thus, is given confidence by BOND BUYERS. The corollary to this premise is that flattening curves and certainly inverted curves are a BEARISH INDICATOR FOR EQUITY MARKETS. In a RISK ON/RISK OFF algo environment, the market continually reflects this, especially as we saw today. However, day-to-day trading strategies are certainly not the major test of the theory. A reader of the BLOG commented on Sunday’s post that the opposite view was what he believed. Again, theories are to be tested for trading like good science “ADVANCES ONE FUNERAL AT A TIME.” (Max Planck).