Public trading strategy
Falling oil prices mask the inflation shock — long bonds set up a tech relief ra
Thesis
Inflation is undeniably high, but the market is looking past it because oil prices are dropping, which usually means future inflation will cool down. This has sparked a massive rally in Treasury bonds. When bond prices rise and yields drop, it makes future growth stocks—like tech—much more attractive. Add in Micron's success, and the tech sector has both macroeconomic and fundamental wind at its back.
Strategy approach
Build a rule-based strategy that enters long XLK on D1 when the US 10-Year Treasury yield drops 0.10% over 2 days while crude oil futures (CL=F) fall 3%. Exit if the 10-Year yield spikes 0.15% or after 30 days.