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BofAML Warns "US 10Y Yields Have Reached Massive Resistance"
Since mid-October the US$ has been under siege. However, As BofAML's MacNeill Curry notes, that decline is showing signs of exhaustion from which a base and correction higher is likely. Curry's "basing" view is further supported by the US Treasury market, where yields (particularly 5yrs and 10yrs) are poised to bottom and turn higher over the coming sessions...
US Treasury yields set to base
US 10yr yields have reached "Massive" resistance. Specifically, the 2.474%/2.399% zone has been a long standing pivot which has repeatedly repelled. With momentum (14d RSI) at its most overbought since May, odds favor a medium term bearish turn in trend towards the mid-Oct highs at 2.759%.
Source: BofAML
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Technical analysis is sooo passé
Technical analysis of a rigged market.
Like clairvoyance for dummies. How redundant be we???
And it's based upon the assumption of the US dollar strengthening.
Uh huh...
Janet, QE4evah, Obiecare, Saudi & Chinas, war of America and her dollar is real...
Sure.
Betting on a strong dollar barring war, etc., is like thinking Aspray is the answer to all your problems.
I nearly always agree with the Tylers on the macro economy, and the ills and corruptions thereof,
but this technical stuff is a hoot. Maybe Ben or one of his butt buddies has a fetish about 2.474 interest rates.
What else could "resistance" mean in today's pseudo markets?
This isn't a Tyler post, this article is from Bank of America. There is a difference. You can post many different opionions and allow the readers to sort out the info. Which they do a fine job of. I enjoy reading opposing opinions it allows me to test my own knowledge.
We got a free thinker, here! Somebody get the net and the stun guns. Straight to the FEMA camps for this one.
"Technical analysis of a rigged market.
Like clairvoyance for dummies."
Even rigged markets hit technical resistance and support levels, testing and retesting them. From 4/08/11 i have a declining resistance line on TNX, which was tested 3 times on the weekly. It then broke out and rose to another longer term declining trend line going back to June 2007, where it reversed, once it hit that line. The weekly is sitting at the 200ema, having pierced it and closed a hair above it. The daily 200 ema is 23.5, where there is a gap up in price on 6/20/13. The 200ema is also near a 38 fib retracement of the move up from 7/25/12 to 9/05/13.
Whether the market is rigged or not, technical analysis still applies.
At some point, even a rigged market reverts to its mean.
Wait till he shows you his proprietary oscillator.
If you are as ugly as Yellen, you'd better have an industrial strength vibrator.
Support is support till broken
A concrete vibrator should do the job.
I'm soooo sure the Fed's trading desks will see this chart and start dumping treasuries...and the Japanese, and the Chinese...these notes are for the beyond stupid muppets.
Of the $17 T Treasury debt...$5 T is intergov debt that will be rolled (forget about that)...$12 T in public marketable Treasury's - $2 T in bills (forget those) - the remaining $10 T is in Notes / Bonds...of this, foreigners own $5 T, the Fed owns $2+ T...so there is "only" a little less than $3 T not held by Nation state actors...and that $3 T will be devoured by the Fed, ESF, or off-shore currency swapping partners as needed upon rollover.
What Treasury "market" is BoAML speaking of???
the "Fuck the Troika" movement in Portugal gains momentum:
http://www.demotix.com/photo/3060491/portuguese-hold-protest-against-troika-lisbon
LOL!! Inverting the commitment. Gotta love it.
Completely OT: Cheers to J.B. Mauney, the 2013 PBR Bull Riding Champion! Tyler, it would be cool if there was a little bull we could click that would direct us to clips of bull riding. Since we live in an artificial, plastic, sissified, commiefied world, a blast of in-your-face-rodeo-realism will do wonders in times of doubt. Plus, aren't we all, figuratively speaking, trying to ride that bull?
Sure, you're going to jump on Asteroid and tour the neighborhood.http://www.pbr.com/media/resized/39955_0_167x167.jpg
P.S. We said "COMPLETELY OFF TOPIC"
I thought that this was apropos. It is, after all, a world dominated by bull.
Funny, bulls "ride" cows. Humans (men usually) ride bulls; something queer about this...
More "reality" would be out bucking hay bales in a field. It's real WORK, not some sort of show (which, when viewed as such, is all the same as this "economic" BS).
US 10Y Yields Have Reached Massive Resistance
so also has their stock price. lulz lulz lulz
The 10Y will go back to 3% ? Uh oh.
Unleash the QE 4 EVA AND EVA AND EVA ...... AMEN!
Technical Analysis still works^^ By now trading the fundamentals is the dumbest thing to do in my opinion.
The fundamental trade has not worked out for years, since the market is supplied with a good amount of money - However, Technical Analysis does not car weather the market is rigged or not - It just shows you trading opportunities.
But well - since we all agree that the market SHOULD tank sometime ... we lay low ... and wait until the time is right - don't miss it though
The technical trade is, as follows:
extrapolate Fed's balance sheet growth out for 2013, 2014, 2015 and plot the S&P accordlingly...plot the Treasurys yields on the inverse. That is as technical as need be.
However, do not try this with commodities or PM's - does not correlate...did perfectly from '08 - '11 but not since August of '11...hmmm.
There is a guaranteed bidder until there is taper, and if there is anti-taper, the bid is even stronger.
There is no significant growth in the economy.
Why would yields rise? The only reason they rose a few months ago was the taper meme. With it gone, why would they rise -- other than desperation on the part of 2/20 guys to get money out of bonds.
These guys just have not figured it out. 85 yr olds are not going to play in their share buyback bullshit S&P. They will park in bonds, just as they always have.
Bingo
The taper is impossible, the dead will walk first.
The question really is: how much more than 85 billion dollars a month will the rest of the world tolerate before it sez...bye buh...
When the panic out of treasuries comes it will be so violent the dead will complain about the noise.
Speaking of the dead, the US economy's wake will be quite the shindig.
Best as I can tell reading the offshore press, which few amazingly do whilst thinking they have a pulse upon the rest of the world, it will be like one hell of an Irish celebration of life with half the world partying hard, happy as all hell...
Well, yes and no... "Yes" in that it'll be the (start of the) end of US manipulations. "No" in that shredding the credit card means that business drops off substantially (sure, it's business that's ringing up more and more accounts receivables, but, the name of the game is "transactions"). It's a big ship, and everyone's on it...
Don't forget that crushed volumes tends to also crush margins, as economies of scale reverse.
"Why would yields rise? The only reason they rose a few months ago was the taper meme."
Rates have risen every time the FED has QE'd.
The 10 year has been rising since 7/25/12. That was well before the taper meme. They only rose rapidly after the taper talk, but while QE was still in effect.
The yield has broken out from a sharp declining trend line and hit resistance at a slower sloping trend line. That is the next declining resistance line to be taken out by higher rates.
Those momentum indicators don't mean dick, you can choose the one that produces the desired "prediction"out of a whole catalog of them, or just change the parameters.
Yeah, doesn't it all just map to King Fiat, the USD? For sure, a fine metric/basis to provide "realistic" data! </sarc>
BofAML knows the way. Just shut up and pay the commish.... don't forget the stop losses (commish) and do it in tranches (commish)... muppets.
But the technical pictures in all the colors are so cute....
I like pictures of ponies, too.
look, a pony!
I really like the ponies with the one spiral horn...uni cornus
As long as the daily FED POMO prints, tech analysis and fundamentals mean nothing.
"As long as the daily FED POMO prints, tech analysis and fundamentals mean nothing."
When i look at the chart and squint, i see a head and shoulders bottom on the yield.
The rate has gone UP every time the FED has QE'd, as Denninger for one, has noted. If the FED is going to not taper, the debt market is going to react to that. The rise in rate has gotten ahead of itself. As with any market move, it has to back fill before moving up again.
In a fiat or paper currency regime...one can ALWAYS generate positve levels of inflation.
........................or so I have been told.
I agree, bonds are at critical point. However, if they keep moving sideways between the 200-day and the 20-day I think they could pop thru the 200-day and move higher (in price). They are overbought, but they're also forming an inverse head and shoulders. What they need is to pop thru that 200-day and consolidate sideways, then we could see a move up for months still, especially if we see the flight to safety this winter that I think is likely.
My bias is that I think stocks are going to peak in December no matter what the FOMC does. If there's no taper I think the big money will sell into that strength, partly to book profits at year end, and partly in anticipation of what will surely be another debt ceiling disaster this winter. Therefore, bonds could catch a bid as money moves out of stocks. I'll take this view more seriously if we continue grinding higher in stocks up to the Dec meeting and if bonds sustain basically where they are or pop higher.
Gold and silver seem to have bottomed for the medium term. We'll see if the big money wants to run some stops before FOMC on Wed, but I think silver will make it to $26 on this move and gold somewhere around $1500. If that happens I will likely get flat as there should be a lot of willing sellers in that area. I won't be convinced silver is going to $30 until it holds above $26 for days. I will remain open to the possibility that we go all the way back down to the lows until we hold that $26 level.
The dollar is at a critical point also. I'm hoping to see sideways to upward movement the next two days, then I suspect a strong move down on Wed's no action by the Fed. The thing to watch is how the dollar handles losing support at $79. Will it find big buyers and reverse, or hold? If it holds, I suspect the dollar will continue downward and bottom at the monthly uptrendline currently at $75. If that is timed with either a taper at Dec FOMC or the winter debt disaster, then I'm leaning toward the dollar catching a strong bid for a long time. My bias here is that I believe we will see a deflationary collapse before the dollar gets destroyed and while I totally get why people say the Fed will never taper, I'm not convinced, and I think something will happen this winter to cause a flight to safety, whether that's more sequester (lessening of gov't deficits and therefore room for Fed bond buying) or Japan falling apart, or a taper...I don't know, but I think the dollar will trade at $89 before it ever dies.
I'll adjust to the technicals as they happen.
We must be related?
Who's your daddy?
Sorry, couldn't help myself.
And, really, it's not like stocks can go anywhere given that growth is done for. The last one at the circus will be the carnival barker, "come and get yer bonds"... as/after the markets have died.
POMOFluffers will save the day.
Good time to work a TLT/TBT pair. Get paid to wait for rates to come back down after overbought worked off, and as poor economic reports come out. Especially as oBUMMERcare premium shock hits. Merry Christmas dem voters!
Gold at $1,353.40 so far. If we hit that 1380 level it is bullish 100% guaranteed in trade landia.
.
Massive support or reverse head and shoulder with an inflationary kaboom. Only time will tell.
bullish, definitely.
Ah. He means resistance in bond price not yield. I hate when they mix up the language. The yield is heading for massive SUPPORT not RESISTANCE. geez i am all messed up now. LOL. JUST BTFATFHFFFFFF!
http://www.google.com/search?q=%22downward%20resistance%22%20technical%2...
Issue your own bonds. It's easy.
http://www.offshorecompany.com/banking/how-to-start-a-bank
Over.
Pure Bull Shit 10 year yield will reach all time lows.
Japan/China is heating up, the war was always going to start with China/japan over gas reserves. Since Obama got played like a fiddle by Putin in the middle east, his "distraction" cue is chiming again. Russia won't get involved.
http://portal.ransquawk.com/headlines/china-says-japan-shooting-down-dro...
http://www.theaustralian.com.au/news/world/japans-pm-warns-china-on-use-...
http://www.abc.net.au/news/2013-10-28/japan-china-war-of-words-erupts-re...
Such is life in our money printing Keynesian dreamworld.
Chaos reigns, markets hate war.
China wins. Japan has no kamikaze anymore just hello kitty boys. Perfect timing.
Over.
I dunno fellas, them Hello Kitty Boys could be pretty attractive to them lonely Chinese draftees out there on the frigid Mongolian Plain, staring at goats and yurts all day.
You guys ever smelt one of them Mongolian gals up close and warm?
lol
that made me chuckle
But you have to watch out for what you might catch. Fukushima disease?, or just use protection (clothes pin on nose [for Mongolian gals])? hm...
Gas is dirt cheap. I'd love to see those ROI calculations. Can't possibly be profitable for anyone.
The likelihood of a conflict in next 2-3 years is minuscule.
"Gas is dirt cheap."
That is not the same as being "affordable."
And while "profitability" has merit in a growing environment, it becomes (merit-wise) less so as things trend more toward susbsitence levels: people tend to take over means of any/all "production" in their local environment.
"I'd love to see those ROI calculations. Can't possibly be profitable for anyone."
Well, if it's anything like the US cattle industry they're running pretty negative: yeah, think about it, how the fuck can a huge industry like the cattle industry keep going when it's running negative? And, should we, in the future, even have the energy to spend dissecting things it's quite likely that we'll find that we'd way-overestimated ROI to begin with.
"The likelihood of a conflict in next 2-3 years is minuscule."
There's a "conflict" occurring NOW! The only way that one could work "miniscule" into this would be the SIZE of the conflict, in which case the current conflict is "miniscule" compared to what one day might occur*.
* I don't, however, see any real reason for China to invade/beat up Japan, other than it being due to some big nationalistic flare-up which would unleash Karmic reciprocity over the Sin-Japanese wars of the past. OK, if Japan attacked China (a reoccurring theme?) then I could see retaliation: more of an instant Karmic action/event.
Is this the point where China takes back all the factories and equipment that Japan stole from it back during the second Sino-Japanese war? Japanese are going to learn what Karma means... (maybe shutting off trade, forcing the aging Japanese to decay among their radioactive wasteland)
If rates go back up to 3% Yellen will buy $80 Billion a month, or $160 Billion a month.
It's insanity, but just look at the last ten years; insanity distilled in a bottle and drunk daily.
Yields have hit massive resistance? Wouldn't that be prices? Yields would be at support if "yields (particularly 5yrs and 10yrs) are poised to bottom and turn higher over the coming sessions..."
They mean "downward resistance", so yes, "support".
It doesn't matter that a mere 3 trillion is owed to foreigners. Prices are set at the margin. QE is a testament to that fact. Foreigners, the important ones especially, are no longer net buyers and the mere hint of U.S. monetary authorities easing up on QE caused rates to move from 1.5 percent to 3 on the ten year. Now that rates have frame shifted up it will take QE on steriods to get them back down again. But even that isn't likely to acheive the desired result.
"Prices are set at the margin."
It's always been only a slim line... One could think "1%-ers" and get the big picture.
The only race left is to be the last one standing to cross the deflation finish line. "Private" entities cannot force people to buy their products (well, those that aren't part of the MIC circle-jerk). That leaves only the "public" entities, doing so through "policy" (read "prisms and mirrors"), until, well, until people stop "buying" the absurdities...
It's all Greek tho isn't it, which only means America takes it in the ass in the end... as a double negative.
Mortgage rates don't even matter anymore since it's all zero down (or 3.5%) Never-Pay-Back Loans anyway. Sellers/Builders are selling 'm like hot cakes using their own mortgage lenders but who will get stuck with that smelly pile of defaults is the question.
Can they possibly sell them to the Chinese again? Hong Kongers? What warm bodied sucker will buy them?
I think that the Chinese would rather continue to chase the real estate bubble in Canada.
http://www.foxnews.com/world/2013/06/22/chinese-buy-up-canada-farms-is-b...
Then again, it's not necessarily stupid buying farm land... (but when things start to collapse foreigners aren't likely going to be able to hold on to it)
I think that this has some linkage here, given that we're talking about where money is flowing:
Most Chinese Stocks Fall as Liquor, Drug Shares Drop on Earningshttp://www.foxnews.com/world/2013/06/22/chinese-buy-up-canada-farms-is-b...
Sounds to me like the Chinese are staying home (not running around drinking, which can lead to doing dumb things which then leads to increased medical needs) and paying more for energy.
Margin compression. Money is really starting to get worried... (makes the above noted farmland purchases a seemingly pretty smart move)
Lots of focus on 10Y - fair enough.
3 month T-Bill is key - the US rate follows it as shown
http://bullandbearmash.com/about/us-prime-rate/
Perhaps there will eventually be 1 Day T-Bills? You know, one day at a time... (future is just WAY too unpredictable)
For a lack of a better place to present this (possible thread-jack, but in the entire scheme of things it seems like this is justifiable under the "money flows" theme of this article):
Rajan Seen Raising Key Rate to Tame Fastest Asia Inflationhttp://www.bloomberg.com/news/2013-10-27/rajan-seen-raising-key-rate-aga...
So... perhaps there's an outlet after all (for sellers of US equities)? One has to marvel at the desperation going on with/in India, as if offering up higher rates of return is going to do anything other than flood them with hot money (and spike the shit out of inflation). It's like feeling smug that you can find the gas leak in the dark because you have a box of matches...
NOTE: I'd LONG ago poo-poo'd all the Long BRIC folks. One by one the BRICs are dropping... (last one standing here will be Russia)
Yeah, all the economic news is SO GOOD that I am sure rates are headed way higher.
My butt.