Those turns (off highs in yield) have been signaled by an outside month (Higher high in yields than prior month/ lower low and close below prior month low all at the trend high) or Double Tops
The outside months came in
October 1987 (Market crash)
Jan 1995 (Goldilocks/benign backdrop)
Nov 2018 (What looked like a benign Goldilocks backdrop until Covid hit)
But it is the double tops that have been more problematic.
March 1989- Housing and savings and loan crisis
April 1997- Post Mexico crisis but just ahead of Asia/Russian/LTCM crises
May 2000- As we headed into eventual Dot Com bust as Fed raised rates to 6.5% and Real rates to almost 400 bp's.
June 2007- On the cusp of the GFC
We did not have an outside month at the high of the trend in October 2023.
The timeframe of the prior double tops has been as little as 4 months (2000) and as much as 17 months (1989)
In 2007 it was 12 months.
2000 and 2007 are the periods that to me have market and or backdrops most similar to today and the average of those two for completing a double top was 8 months.
That takes us to June 2024 (same month as 2007 and 1 month later than 2000)
I still believe this ends in tears- but patience is the key.
Looking at history this suggests that we could revisit or get close to the trend high at 4.99% next month and then the wheels start to fall off.
