John Kosar's  Instablog

excerpt from Asbury Research's Keys To This Week
Monday, April 24th 2012
The US Stock Market

Key # 9 of 12: The Yield Curve.
US 2s/10s Curve Is Flattening From Major Resistance:
BOND MARKET BETTING ON WEAKENING ECONOMY.

Chart 2 below plots the US 2-year/10-year yield curve since 2010. The red highlights point out that during the past month the curve has tested, failed at, and is now flattening from major overhead resistance at 188 bps to 199 bps, which represents its 200-day moving average (a widely-watched major trend proxy, orange highlights) and its August 2010 narrow extreme (red highlights). This recent sharp reversal in the 2s/10s curve, which has narrowed to 170 bps through the end of last week, suggests that the forward looking bond market is now starting to price in a weakening US economy in Q2/Q3 2012.

(click to enlarge)

Chart 2

Chart 3, which plots the S&P 500 daily since 2009 in the upper panel (black bars) and US 2 year/10 year yield curve in the lower panel (blue line), shows that a flattening yield curve led US stock market peaks in April 2010 and May 2011.

(click to enlarge)

Chart 3

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Keys To This Week, one of 8 different reports that Asbury Research produces for subscribers at various intervals throughout the month, is a detailed weekly outline of key market factors and corresponding charts pertaining to the US stock market and market sectors, US interest rates, and the US Dollar that are most likely to influence US financial market direction during the upcoming week.

Asbury Research subscribers can view the entire report by logging into our Research Center. Interested investors can request further information about our research by clicking here and completing the on-line form, or by calling 224-569-4112.

VIDEO: John Kosar, Director of Research, appeared on CNBC's Street Signs on March 27th 2012 with hosts Brian Sullivan and Mandy Drury to review Asbury's August 10th 2011 call for an emerging bottom in the S&P 500 and subsequent October 20th call for a retest of the S&P 500's May 2nd 2011 high of 1371. (The S&P 500 reached our 1371 target on February 27th, 2012).

Kosar also discussed Asbury's expectations for US stock market direction in Q2 2012.

Click Here For The Video.

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Video's of other recent appearances on financial TV by Asbury Research's John Kosar can be viewed by visiting Asbury's Media Page.

Interested investors can request further information about our research by clicking here and completing the on-line form, or by calling 224-569-4112.

The following are 2 of the 29 charts that appear in our April 2012 US Financial Market Chart Book, which was distributed to Asbury Research subscribers on March 22nd 2012.

US Financial Market Chart Book is a monthly collection of key charts that focus on a broad array of financial data that collectively convey our best investment ideas for the next one to several months in the US stock market and sectors, US interest rates, the US Dollar, and in economically influential commodities.

It is one of 8 different reports that Asbury Research provides to subscribers at various intervals throughout the month.

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A sample copy of US Financial Market Chart Book, as well as samples of our other 7 reports, are available by clicking here. Asbury Research subscribers can view the entire report by logging into our Research Center.

Interested investors can request further information about our research by clicking here and completing the on-line form, or by calling 224-569-4112.