10 year bond broke broadening rising wedge support

12 мар. 2021 г.

Broadening rising wedge broke earlier, low will be tested and yields are going to spike and make new intermediate highs.

1.6% will only be seen in the rear view mirror.

12 мар. 2021 г.

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Of course, someone who doesn't care about money obviously steps in and catches this falling knife right at the exact bottom of March 5th.

16 мар. 2021 г.

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Looking good, that bond pop fade was very reassuring to see.

16 мар. 2021 г.

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And here is the monthly 10 year bond chart. Descending broadening wedge from early 2010s ends up being one of the biggest bull traps ever.

16 мар. 2021 г.

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Monthly

16 мар. 2021 г.

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Weekly

16 мар. 2021 г.

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16 мар. 2021 г.

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18 мар. 2021 г.

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Update. Fomc caused a pump in 10 yr bond price, no idea why seeing as the Fed actually raised projected GDP growth to 6.5% from 6.1% and also raised inflation expectations (which would imply even higher yields required to offset).

In any case, the pump was entirely preplanned to trigger on the 2 pm FOMC minutes release regardless of what was in the report. The immediate rejection as price attempted to cross back thru this rotation line was very good sight to see.

This is going to be insane how it plays out, even though there are record shorts, I do not think that necessarily means they are wrong or will be squeezed out. If anything, it implies the opposite, the markets are going to break the camel's back. Bond guys are more intelligent than equity.

18 мар. 2021 г.

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And no, foreign demand will not come in and save the day and Fed YCC hopes is just pure delusion, Fed isn't going to risk losing US dollar reserve status just to save a bunch of zombie corporations and over levered people. I'm pretty sure they're just going to let this one burn. Equities will snap back to reality in a harsh way very shortly.

And no, the argument that higher rates are bullish for stocks is bunk. That may have been correct in a different market environment, but not one in which everyone and everything is levered. Also, people who say that are discounting the knock on effects it has on other countries, say like Brazil which was just forced to hike rates just now to stay competitive.

18 мар. 2021 г.

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Now, the only exception I will make that both bonds and equities can be right, i.e., bonds go down and equities go up is that the market is pricing in hyperinflation.