TNX - ROC @ 2.43%10 Year Yields getting itchy once again.
2Yr - 10Yr worthy of observation.
Dot Plot - 2022 @ 1.125%
Page 4 - www.federalreserve.gov
TNX.P trade ideas
10 Year Note Yield - Short / Intermediate Duration
Inflation has been mispriced in excess of 16 months. The Federal Reserve should have
begin to reduce Liquidity by Mid 2020 as Fiscal Stimulus had taken effect into July into
September when Fiscal Stimulus began Peak.
The Fed's Balance Sheet continued to expand with the Purchase of RMBC/MBS/UST/Corp.
Debt, while Shadow operations under FASB 56 continued to increase nearly matching the
Fed's accumulated Holdings. $8 Trillion in combined Net exposures, provided outsized
gains for Equities.
Bonds began a revolt in early 2021, only to see the Fed step up and employ YCC in early
April, attempting to stem the fastest rising rates in US History.
The Fed and US Treasury can control all Points on the Yield Curve as the Buyer of last resort.
Clearly, the Short End used to require far less effort when re-fundings were under 30 Months.
This is no longer the case, as they expand funds from 5-7s out to the '30s where we have seen
multiple "Auction Failures". Buyers simply refused to participate.
A Creep effect begins to enter the equation with respect to expectations.
The Long End of the Curve begins to flatten, traditionally indicating a recession ahead according
to conventional Bond Wisdom. And therein is the issue, this is not the 1970s and StagFlation
is not the Environment.
We are within an Inflationary Depression and have been for some time by any real and
credible Metric.
Economic Activity began to lag in Q1 2021, by Q2 the results were Peak consumption for
the US Consumers. It will be downhill for into Q3 and worsening into Q4 as we indicated
in July, all metrics were showing clear signs of another Global Slowdown as occurred in
Q2/Q3 2019.
Excess Capacity was quietly, but quickly becoming underutilized, as well as under-reporting
of Global Economic prospects.
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For 2022, I see a rapid and substantive decline gaining Momentum.
Economic Activity was pulled forward into 2021.
Inflation Numbers need to be brought to heel with BLS Recalc for Inflation, taking effect
in January 2022. This extraordinary measure will fail. The headline Numbers adjusted by
this tampering will not change Prices Paid.
Malcontent - the result as What is purported and Reality will diverge to create further distrust
and increasing Loss of Confidence - Quickly compounding.
Quietly, absolutely not... as Monetary Policy will not be alone as the "Build Back Better" Fiscal
Policy has been delayed. Further Stimulus down the road... only serves to compound the problem
and stave off the Pitchforks and Lanterns.
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Covid Variants continue to expand - 19/ Epsilon / Delta / Omicron / New Variant TBA
The Fed indicated in their most recent FOMC Meeting Minutes and Press Conference, Omicron
is an "Uncertainty" and why the FED called it out within their Policy Statement.
Indicating the US Economy could handle the "Omicron" Variant at present while acknowledging
the FED is a "Long Way from knowing what it will turn out to be..."
"It is unclear on how the New Variant would suppress Demand and Supply."
"Wave upon wave, people are learning to live with this..."
Vaccinations, according to the Raven reduce the "Economic Effect."
Timeline for Variant assessment - 3 to 6 Weeks... Omicron doesn't really have an impact on the
Taper as the Chair wants participants to believe.
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The Stock Market is and is not the Economy - it depends on which way the wind is blowing. A
Northern Gale changes arrangements, this is what the Raven is laying the groundwork for into
Q1.
An overextended Credit based Financial Economy has a great number of hurdles ahead in addition
to a Central Bank which may or may not embark on further meddling.
That is immaterial to a larger extent as Global Markets for DEBT are Tightening at a time when
the compound effect of all Economic activity is waning... instructs us all as to how "intent" will
reprice DEBT / Inflation / Expectations and Sentiment.
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Factors that lead to growth in 2021... the plug is being pulled.
Q4 rebound is a seasonal pattern, and yet Holiday sales will prove to have been DISMAL.
The Dollar remains at risk to the upside, clearly holding its own, the Dollar will move higher
at least to 100.
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The Fed can do plod along - Markets will adjust as they permit the Net Drag to do their work for them.
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Regional BAnks are showing two consecutive quarters of Savings Drawdown from Q3 thru Q4.
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The Inflation/deflation debates have always amused me as an Economist. This is best framed within the
context of Credit Malfeasance again the expansion of Moore's Law to an Exponential Function.
Technology is deflationary, it reduces a great many Economic functions while increasing efficiencies
in ways, most fail to understand.
Monetary Policy is the Inflation component with an added twist, the Supply Shocks and shortages due
to the Shut Down of the Global Economy. An extraordinary time in Humanity's History.
This will be discussed at length in follow-on commentary.
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Moral hazards abound and are plentiful at precisely the wrong time.
A Nation of Gamblers - www.tradingview.com
PS. - the House always wins
10 Year Note Yield - 2%+ Ahead Into June - AugustThe Price Objective remains 2.28%.
Beyond sewing the usual seeds of discontent, observe the Larger Monthly Indications.
The above Chart is of extreme importance, it demonstrates how Capital Stocks begin to
turn, Glacial at first, as Momentum builds, they begin to accelerate.
This will end up a 4 or 5 part series discussing the potential impacts.
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Price has broken above 2 Key Downtrends. It is attempting to reach the 3rd, which has acted
as resistance for years.
This is a material change in the underlying Bond Market Note Structure. It is no longer the
conventional depository for Principal and Coupon as a great many believe.
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Capital Stocks are in need of review:
Real Estate - the Hybrid / Principal and Coupon (Rents) A Negative correlation to Higher Rates
with cascading effects to Higher Rates. A 70% increase in Conventional and Jumbo Mortgage
Rates would see a 18 to 24% drop in the Price of Residential Real Estate.
Equities - the Buyback / Prop where Corporate Debt is used for Buybacks
Increased borrowing Costs temper Buybacks, Inflows do not. This is a double
edged sword we will discuss in detail.
Bitcoin - The repository (Not Depository) for excess Liquidity. BTC has a Positive
correlation to rising Rates. BTC has a Price Objective near $137K at the extreme
extensions for Rates of the 10 Year Note Yield.
Bills / Notes / Bonds / - Debt instruments with attendant Hybrid function of Principal / Coupon.
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Bonds (prior to 2006) were traditionally a function of the Business Cycle which has been supplanted
by the Credit Cycle (no longer a Cycle by appearances).
Prior to 2008 Congress would pass a Bill in the Legislature, after speaking with the US Treasury to
determine how to "Finance" its Fiscal requirements. Once the Bill was passed and signed into Law,
the US Treasury would conduct operations with the Federal Reserve Central Bank in New York to
issue the increased Credit/Debt (The FED taking their statutory 6% issuance) to the US Government.
Bills, Note and Bonds would be placed with Primary Broker Dealers (Fed Member Banks) and offered
at "Auction" to the Public, Institutions, exogenous Central Banks, Funds, Swaps and overnight Swaps
for shorter duration T-Bills sweeps.
This funding mechanism for DEBT no longer exists.
FASB 56 - took the Governments Budgets and Funding "Dark" as a "Matter of National Security". The
General Purpose Federal Financial Reports are Classified Documents.
The material Facts of FASB 56 - files.fasab.gov
13 Short Pages well worth educating one's self as to how the Government conducts itself.
TARP/TALF were undisclosed Operations which maintained their Shadow Financing for years.
94% of Americans were against Commercial Bank Bailouts. Privatizing Gains while publicly
subsidizing losses was viewed with extreme displeasure.
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Over the past 14 Year, we see the outcome(s) - Interventions in Auctions by the Federal Reserve,
Yield Curve Control, the Outright Purchase of RMBS/MBS again (this began in 2004 in size as the
Federal Reserve's concerns over Real Estate began to mount).
The FED has become the buyer of Last Resort - currently @ $8.758 Trillion in Assets of which
$8.296 are "Securities" - this excludes "Shadow Operations" of FASB 56.
In less than 2 years, the Federal Reserves Balance Sheet rose from $4.212 Trillion to more than
Double that amount (NET of Shadow Operations)
I estimate Shadow Operation under FASB 56 to be in excess of $3.8 Trillion - this excludes the
Trillions missing from the Federal Coffers @ DOD, HUD and a great many other Agencies.
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Follow - On commentary will begin breaking down the Trends and discuss the potent outcomes
and timeframes for each Capital Stock.
There is a large amount of information to be discussed, requiring a methodical analysis of
all points on the outcome curve.
More to follow - HK
10-YEAR YIELD ANALOGUEPossible analogue from the lead up to the last financial crisis. Potential catalysts still taking shape. Continued central bank NIRP would support this scenario.
TNX - Zimbabwe / YCC / Capital Stock / Melt Up / FX - ECB BOJ EUBonds are at a Critical Juncture.
Unable to serve their function due to YCC we are now
staring down the Crack the Boom Phase V.5
Not much is functioning correctly... not remotely.
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We are quickly becoming Zimbabwe.
Of the 3 Capital Stocks, Equities may well end up the
catch-all bucket and Melt Up in Violent Fashion.
By appearances, the Equity Complex itself is the remaining
capital Stock for the Inflation Trade.
Real Estate is immobile, illiquid and the Bond Market
remains on the Path of Destruction. Both DOA in Real Terms.
If you did not believe this earlier, perhaps now...
The Raven has made it clear you will lose 2x as quickly.
Welcome to Zimmy World akin to Waterworld but we are
afloat in a Sea of Sharks feeding on the remaining viable,
liquid - Equity Complex.
McC OSC's are deeply in negative for all Indices - DEEP.
They declined yesterday as the ES NQ YM RTY all reversed.
Frankly, horrifying as What is, is not what should be as the
Flamingo's Sports Book has gone into DeFib Mode.
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They are using the Recalc to extend and pretend, a concern
we expressed would be a game-changer, it now is realized.
Yes, the Indices are grossly overbought and could face a reversal...
Maybe...
A great deal will depend on how committed Everyone is to the
Zimbabwe Trade.
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Sad, pathetic, destructive - yes.
It is what it is, be prepared for complete Insanity.
It's beginning.
Powell made it quite clear, repeatedly clear - the Focus and cover
is labor. Rates... the slide in 2 for 2022, lied, of course, then added
potentially 3, then mentioned 2024...
The FEDs #1 Mandate is Price Stability... # 2 Full Employment.
Raven went all in by not mentioning Mandate #1, they abandoned
it. It isn't Transitory - it is the way, Instability.
Both are now a joke so depressing, it warrants consideration
as to what they are truly after.
It is quite simple - protect their own.
It disgusts me to write this, but I'd be remiss in not doing so.
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The Only thing that can upend this insidious trend is Yields.
Flattering to Inversion on the Short End will take time.
Equity Complex Extensions to follow in Commentary.
TNX 10 yr. yields TNX so far in Dec. Ms1 pivot point to the MP. So far this quarter, Qr1 to QP. Institutional traders use pivot points.
TNX - Creating Issues
Set your Clock by it...
The 007s begin their Ghost Stories at Highs.
Within mere hours of our 2 favorites Bond Stand-Ins - Moore and Dalton.
TNX wakes up.
TLT drops $4.
Whenever Shevchenko and Dino begin another series of rants, it is a SELL.
The "Wood Paneling" Indicator has never failed.
It remains 100%.
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Since July I have suggested there is no "Safety" Trade in Reality, for Bonds.
It remains hitched to prior paradigms.
For reasons, repeated enough times to not require further repetition, sanguine.
My heart says Michelada, but it's Sangria today.
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The Federal Reserve remains the Ultimate Bagholder, their balance sheet continues
to Hold steady.
Why?
How come?
Wassup there?
There remains a need to Feed.
The FED is going to raise rates, accelerate the Taper to ~$30 Billion for MBS and UST's.
Ideally, they want to conclude the shortest Taper in History by March.
3 Rate Hikes are confirmed for 2022, a 4th in discussion as Forward Guidance on Inflation
is dismal... 20 to 25% for 2022 for starters.
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The Answer is wrong again.
Unsure how mass delusions perform any longer as they have stretched my imagination beyond
what I considered sane, probable... possible, of course.
My mind has more stretch marks than my waist.
Remarkable times.
The Corrupt FedThey lowered rates the whole time Obama was in office to help economic growth, and almost raised them the whole time under Trump...
not sure there is another way to see this
TNX - Meanwhile...Taper Tipper engaged.
Amazing how well they play the game.
The FED is not reducing their Balance Sheet - Bondholders of Last Resort.
The only thing they sold was 1's - 5's.
No One but the Safty Pins truly wants this Junk other than the Retail Herd.
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Ideally, Equities need to go out at HIGHS today.
:)
Ideally.
TNX breaks key pivotTNX broke below the 1.40 pivot that I have been watching. IMO this is significant and not getting enough attention. Especially significant in the wake of growing inflation fears. The bond market seems to be pricing in a slowing economy not a growing economy. Money is getting dumped back into treasuries for some reason. A bond market rally could pull a lot of money out of stocks. Not sure how to play this but definitely something I'll continue to watch.
The endgame in Treasuries?Expect a bounce at precisely 0.618.
Wave C of E should be quick and will cause overwhelming pain.
The final moves in currencies, stocks and Treasuries should be perfectly synced. Nearly tick-for tick: EURUSD should crash to 0.86, SPX will get dispatched to 1500, and 10Y will hit 4-5%.
The dollar and the Yen will be the sole survivors. (USDJPY below 100).
10 Year Note YieldWassup here...
Appears a Large move is approaching.
It may Range into Mid December, but there is
and Enormous move in Yields quickly approaching.
TNX bounces off lower trendlineTNX bounced off the lower trendline in this longer term consolidation pattern. Basically a break above or below the two pivots identified by the red arrows would be significant. I will set alerts at both points.
trying to decipher 10 us yield bonds moves ... trying to decipher 10 us yield bonds moves ... lots of bond related ratios for trends
Stocks Future will be based on 10 Y BondThe movements of the stock market and digital currencies will be dependent on the head and shoulders pattern on the US Treasury bond index, which gives an indication of the imminence of a major price explosion if it is broken upwards, which means without any doubt a significant decline in the stock market and digital currencies as well. also keep buying stocks as long as the resistance still hold , we need a real weekly break
TNX - Sh_t Mixed AgainTraders appear confused as to what to do.
It's one day of High ROC followed by a pause,
followed by High ROC.
Bonds were SOlD @ 8 AM EST.
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Equities still blow out to the upside...
Then the Velvet Glove comes off.
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Santa Crash Landing IMHO
Somewhere over Siberia.
The Buyer of Last Resort... keeps failing.
TNX RATES TO SOAR MIN 1.82 The long term bull market in bonds and low rates has ENDED We have started a new rise in rates and contraction in the Economy housing stocks and tech to begin a new BEAR MARKET 2022 is a major 88.5 to 89.1 yr cycle in which ALL BREAKS DOWN TILL MID TERM CYCLE
TNX - The Event we've been waiting for since July We have repeatedly indicated the "Everything Must Go Sale" would begin
once we saw 10 Year Note Yields Cross 1.645 and then move beyond 1.71
to 1.76 and onto 2.12%
All asset Classes being sold is NOT something the Majority of Investors
remotely understand or believe it possible.
Preferring Correlations and Inverse Correlations to remain the Norm.
It isn't and the September Sell-off appears to have been forgotten.
Not surprising, memories are short, convictions are strong.
Price does not care what you "believe" - rather it demonstrates the
convictions of your beliefs.
Belief in the 11X Bond Complex... remains at all-time highs.
Return of depreciating Captial is favored to Equities which continue
to be the perceived Inflation Hedge.
The circular Logic is a complete Sh_t Mix of Mass Delusions as participants
will discover one the Next Great Unwind begins.
Everyone losses a hand.
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With last week's one Day Wonder spiking @ nearly 10% while the DX began
to move over 95... RCO's are again heating up.
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We indicated the Infrastructure Bill would end up @ $1 Trillion after all
the non-sense - Ultimately it was the FEDs handlers who reduced the
increased threat of a Bond Market Accident.
Suggesting DC piddle into a far less Aggressive Final number, Rates were
tamed down, preventing an even larger protest from the 007s.
Monday, President Biden signs into Law - $ 1 Trillion Infrastructure Bill.
AKA - another Giveaway to Insiders.
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How much time does this Buy for the Equity Complex, we shall see.
It will become yet another nail in Confidence Coffin as Inflation continues
to Beat Expectations.
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Q4 begins to see squaring of Position for yeat end begin into December.
With Notional Bets to a Strong finish to 2021 for appearance's sake, there
IS something out there... that will blindside the markets.
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The 30 Year Auctions Failure... did not go unnoticed.
TNX - 10 Year Note YieldNo mention of the 2% jump off the Trend Line for Yields.
We sold TLT 3x today.
ZN, as indicated after the 8 AM Sell, provided the Direction.
The Equity Complex is setting up the Reversal with Squeeze
after Squeeze.
For the next 3 Trading Days - Continue to press all SELLS to 45%.
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The Bond Market will call the FED again...
We anticipate a Chop into one Final High prior to a Sharp Reversal.
TNX - 10 Year Note YieldWaiting on ZN to break 130 again.
Rates up .9% this morning.
IF the FED panders to Equiites.
Bonds will sell, there was an 8 AM EST SELL
TNX - RSI remains above 50The 10 Year Note Yield, in prior downtrends would provide the RSI in the Negative well below 50.
ARCA, as always is used to Prop Up the FANG GANG.
But BANG, the die is cast.
Anticipating a reversal in the 10 Yr Yield into the FOMC, which creates and enforces the SELL in
TECH.
EPS, as indicated months ago, would be a complete disaster...
Delivered.
NQ ES YM - 4 Gaps below
Symmetry mirrors September 15, 2021 reversal setting up.
2% - 2.12% - 2.37% Price Objectives on Break of 1.765
