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Forget About Stocks... This is the BIG Story For the US
While
everyone and their mother brays on about stocks, something of far greater
import is taking place in the US bond market. That “something” is the 30-year
Treasury taking out MAJOR support:
As you can
see, the 30-year Treasury has just sliced through MAJOR support in the 119-120
range. After this there is support in the 112.5-115 area and FINAL support at
105. After that, it’s GAME OVER.
This in of
itself is bad enough, but when you step back and take a big picture look at the
long-end of the Treasury curve you see that these support lines are all
secondary to the trendline that has supported long-term bonds for over 20
years.
The above chart shows the clear trendline that has
support the long-end of the US Treasury market since the early ‘80s. We’ve
tested it numerous times in the last two decades, but not ONCE was it broken.
We’re close to breaking it now.
Buckle Up!
Graham
Summers
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GLD and EDV, 50/50 weight, collect the excellent div/cap yield from EDV, ass covered by GLD. Kind of hard to lose sleep @ night over the STRIPS roller coaster when you have the ace in the back pocket at all times. I know this is way the fuck too simplistic for most of you, but it's cheap as fuck from a commission standpoint and, well, it's actually working.
08-10 time period (NAV% cumulative):
BND + VTI (equal weight): 13.42%
GLD + EDV (equal weight): 43.17%
List of names of who beat 14.39% annual NAV gain from 08-10 without doing something criminal?
If everyone knows the books are cooked - and the unemployment numbers are false - who's to say whatever data they use to come up with all of this stuff is real?
I mean, we're playing a game invented by man - and the game runs because people believe it will work - for all we know, the riots in egypt may have never happened - it could have all been done in a Hollywood basement - probably not - BUT I'm just saying anything is possible. Through all of this financial crisis I haven't experienced one hiccup.
It's frightening as hell to read all of this stuff about collapse, but then step outside and it doesn't seem like much has changed...to me anyways.
It's all in the mind. Imagination and belief are the only things that separate us from animals.
I'm just pissed that Snickers bars are a dollar in the vending machine at my job.
it's a blessing in disguise - quit eating that shit. It's made by the same corporations that lobby to screw you over.
In transition to making my own food from raw mats bought from local farms, just lazy. You're right though, a dollar for a snickers when I can buy a lb of organic flour for the same amount is making that transition easier on the mind.
This will be a major kick in the balls to the banking cartel.
Really???? I don't think so.
They will profit from what is coming. Think: If you own the printing press and the legislature and the executive and most of the courts ( what did I leave out ) oh, the greatest military might ever assembled, do you really think anybody will be able to last more than a nanosecond against them?
The only way anybody will be able to kick any one of them in the balls is if they somehow get close enough at one of their country clubs and physically kick them in the nads. Good luck with that, and if you happen to get the chance give them a good one for me.
I'm talking in terms of markets and asset prices. US Gov paper has been one of the few places for them to try and repair their balance sheets. They take the spread of Fed Funds, buy Treasury paper and collect and also, sometimes, sell Treasury paper back to the Fed.
The kind of moves this story is saying that could occur in the 30 Yr. will greatly effect banks in an area where they have been able to safely make money. It will also ripple through the rest of the fixed income world that will smack them on their balance sheet AND on asset management division.
Well, if you say so, but i sure as hell hope it happens before long. I've been short at 120.50 for months and can't seem to make a nickel on a sustained down swing.
Hurrry up, willya?
Two thoughts:
1 As long as the fed buys long bondsthey will not tank, the dollar will.
2 If QE stops ( I think unless the fed links the $ to gold, that is impossible) the bond will tank. Think about what would happen to the U.S and world economies if interest rates on U.S. paper go to say just even 10%. The debt load that needs to be re financed would go to maybe 200% GDP in a few years or less. There would be absolutely nothing left to finance private industry. How would farmers even finance next years crop. DESASTER!
Careful what you wish for.
What problem? Easy as you like just raise the debt ceiling, Benny prints more Benny-Bucks and gives them to Timmay for a new line of credit to US citizens to pay off over 30 years.... oh they've already mortgaged everyone for 30 years already, better make it 100 Yr T's then!!
Honestly no problem here, you lot are delusional, just pay up and shut up
100 year bonds are for railroads. real debtors go perpetual annuities.
Barrack Timmay and Benny like the sound of "perpetual' ...please give 'em no more ideas ......regards 100 Yr T's for railways don't you think it's strange the debt takes considerably longer to repay than the capital investment is in situ 'earning' its keep? ....if you can't pay back an investment within the life span of that investment you haven't got an investment, you've got a black hole for pissing money away
I thought the plan was to replace all Americans' retirement investments with perpetual annuities? I don't think I'm providing any new ideas for them ...
At one point, they were considering 50 year mortgages. I'd assume life insurance would have been a prerequisite to qualify.
As for railroads, operations revenue should cover the maintenance fees and the railroad itself should last indefinitly, but I have no idea if new rails were what the 100 year bonds were actually going to fund.
Is technical analysis valid in a heavily manipulated market? Most technical methods have as their underlying assumption an efficient, free market where human behavior manifests itself in recognizable patterns due to the complex interactions betweens all players seeking their own rational self interest through the pursuit of profit.
However, the Federal Reserve disrupts this equilibrium because of not only its disproportionate influence over the market, but because its primary objective is interest rate targeting. And since its traders are preumably aware of how technicals are interpreted by other market participants then a sort of prisoner's dilemma exists (to draw reference to Game Theory).
Looks like the only real "braying" is from the guy at this company. The 30-year bounced off his presumed "support" line and is gaining. Maybe he meant to publish this a few days ago. Or maybe he's holding his chart upside down.
And are my eyes not working, or did his "unbroken" trend line get broken in four places?
I don't suppose being rated as unsolicited will really help, though.
Indeed it has. Maybe he can't draw straight. But no matter, don't let the facts get in the way of a good thesis.
Yeah, I don't see it either. Much as I'd love to see the long bond finally have its day in hell, I'm not seeing it here. Not yet, at least.
I am Chumbawamba.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3186525&cmd=show[s189163838]&disp=P
There is a possibility of a massive head and shoulders from Oct '08 to now on the USB targeting 30 points south to near 93. I'm not saying anything, but the possibility is there. Something to at least consider.
I'd say the bond has to clear the up trend line to be a problem,... and I agree it won't be quite yet. I'd say later in the year after QEIII is clearly going to be a reality. Then it'll go if it's going to go.
98% of the general public does not care about this ... They do care about the fact that >> Justin Beaver cut his hair .... the hairs that fell on the floor are going to be sold.... Rome is burning to the ground and most americans don't care... What a crazy world.....
I was justin beaver last night - no hairs though
+1 Someone had to say it.
THEY ARE SELLING HIS HAIR!!! Where do I get in on that action?? By the way who is Justin Beaver??
BTFH!
Ward Cleaver's secret love child
I took a similar look at the yield earlier this month. The breakout reversal is near, but probably will happen in late 2011:
http://english.economicpolicyjournal.com/2011/02/is-3-decade-bond-bull-market-officially.html
i agree with your analysis. I believe Marc Faber does as well. short-term oversold (next several months), long-term suicide.
The spike in rates is the trigger event. Brace for deflation.
or brace for QE3. One or the other. BTW whats a good hedge against deflation?
Livestock.
Ouch
BTFD!
mmm, I dunno. It looks like TLT is about to surprise everyone with a (probably short-lived) rally. Not that the long bonds are an investment I would chase here, but it's usually a good idea to remember that the inevitable is not necessarily imminent.
GI GO.
Ouch
ZBH1 at 121'16...does 119-120 now become support?
Just a quick look o' the graph, the two times it did break slightly below support, it snapped back up on the general trendline headed northeast. Point being, the data argument doesn't back the rhetorical argument. This article is retarded as usual.
Agreed. This is the least convincing technical analysis I have ever seen. If anything, that last chart says it's time to buy the long bond.
i'm scared.
how can i sign up for the newsletter?
That line appears to start in 1995 so the claims of two decades without a breach are only off by 20%. I also just finished reading Guy Lerner's latest (The Technical Take which also appears here regularly) and he says the trend is changing to lower long term interest rates. I actually would not be surprised to see an underthrow of this line again between now and mid year. Seems to me that May through July has usually been a good time to start renting the Long Bond.