This indicator is ringing recession

BY ANDREW GIOVINAZZI

February 27, 2025

Yo Pit Crazies,

If you want to learn a disciplined trading strategy that sets up a trade every day, get into the Zone with Mark and Voz everyday. What I like about it is that it waits for an opportunity to initiate the trade setup sometimes it will and sometimes it won’t. The idea has to get somewhere before the trigger is pulled.

That is a lot like volatility trading. I wait for a level, then make the volatility trade that best suits the environment or Zone as it were.

Right now interest rates are falling through no action of the Federal Reserve. The big concern is cutting all these jobs and spending will be bad for the economy. But will it in the long run? Well that is what the market is trying to decide.

TLT 6 month chart

So is the IShares Barclays 20+ year USGov Bond ETF (Ticker: TLT) signaling a recession or just less demand for bonds?

Rates are not back to where they were in September

Just look at the chart above. The higher TLT goes, the lower rates are. Right now investors are looking at near 5% long term rates as something they want to own. I bought more TLT this week.

The larger issue is the raft of news coming out of the White House and turning the algos nuts. That might continue for a while or it will end relatively soon. Once the D.O.G.E starts reporting and more trade deals take place, the faster the intraday volatility will cease. I think we are more likely to have a 0 GDP growth year.

Eventually that should tamp down the market volatility but I still like TLT has a long trade this year. It might outperform the SPX.

To Your Trading Success,