Category Archives: Interest

Inflation Siesta

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The latest economic data came out this morning, and it indicates that, in spite of the Fed’s best efforts, inflation just is not kicking in. CPI fell for the fourth month in a row, and the US dollar has continued doing what it’s been doing the entirety of 2017, which is sink.

In turn, precious metals are getting a hearty bid (which will probably blow me right out of my DUST position at the opening bell). For gold bulls to reclaim power, they’ll need to close the gap I’ve pointed out below and push above it. Otherwise, this is just going to be another opportunity for the bears to take advantage of precious metals weakness, more or less in place for the past six years and counting. (more…)

3 Things the Charts Are Saying About the 10-Year

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Three things the technical set-up is telling us about the benchmark 10-year Treasury yield:

  1. The Momentum low of the correction after last year’s advance from 1.32% (7/06/16) to 2.64% (12/16/16) was established on 4/18/17 at 2.17%. All of the downside action in yield thereafter, into mid-late June 2017, has been unconfirmed by Yield Momentum.
  2. On 6/14/17, Yield hit its corrective low print at 2.10% off of the December 2016 high at 2.64%, which was accompanied by divergent, much higher Momentum readings. In addition, the 2.10% low represented a 38% retracement of the entire prior major upleg from 1.32% to 2.64%.
  3. The 6/26 minor pullback yield low at 2.12% followed by a sharp upmove to 2.25% on 6/28 represents a successful retest of the 6/14 low at 2.10% and a successful retest of the dominant up-trendline off of the 7/06/16 historic low yield of 1.32%. From a big picture technical perspective, benchmark 10 year Treasury Yield appears to be in very promising technical condition ahead of the initiation of a new upleg that extends its first bull leg from 1.32% to 2.64% towards a projected next target zone of 3.00%-3.15%.

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Signs of Life

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If there’s one thing that has really stood out over the last few months it has been the SPX tape’s tendency to just stop doing anything interesting for several days at a time. SPX has tested the daily middle band as resistance every day for a coma-inducing eight days, but I was saying in my premarket video to Daily Video Service subscribers at theartofchart.net an hour before the open that there was good reason to think that we would see breaks down on equity indices today, and we may well be seeing the start of that now. You can see that premarket video here. SPX daily chart:

170411 SPX Daily

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Key Level on the 10-Year

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By Mike Paulenoff, MPTrader.com

After the first day of trading of April, a relatively uneventful one for the equity markets in general, the most consequential market for me is 10-year yield, which continues to exhibit constant weakness that commenced immediately after the March 15th Fed rate hike, and currently is bearing down on a critical 5-month support level at 2.30%.

If 2.30% is violated and sustained, it will trigger potential for downside continuation that projects to 2.10% optimally, and possibly to 2.00% prior to the next upmove in the budding yield bull market off of the July 2016 historic low at 1.32%. The 10-year hit a high in mid-December, 2016 at 2.64%, and probed that level a second time into the March 15th, 2017 Fed meeting. (more…)

MSM: Full Nonsense Mode as ‘Trump Trades’ Unwind on Schedule

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I’ve been watching the herds to try to determine just when the interest rate topic among the best and brightest (as chosen by the media) would start to pivot from ‘rising rates!’ hysterics that have been locked and loaded in the public psyche since the US election to a sort of ‘rut roh, maybe we got played again… ‘ realization that Rome – and a Great America – are not built in a day.

What I am trying to say is that after the previous media headlines last summer (mainstream media: NIRP & BREXIT!!… everybody into risk ‘off’ bonds!) yields reacted a bit and rose as they should have, from a contrary setup, in order to catch the herds off sides.

But then the hysteria over the Trump election led to the Druck’n Suck-In of the true believers (or “Sons of Druckenmiller”) and… here we are with everybody anti-bonds, pro-reflation and pro-interest rates.  Maybe they would be right this time, but then again, given the herd’s history (from Sentimentrader w/ my markups)…

30yr bond

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