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As The 10 Year Selloff Accelerates, "All Eyes On The 2.27%/2.32% Support Zone"

Tyler Durden's picture




 

For the chartists out there (and these days that would mean pretty much all momentum-igniting algos who are the only ones left trading these here "markets") the following note from SocGen explaining why if/when the 10Y selloff rises above 2.32% it may be a time to panic (and vice versa) is quite relevant now that the 10Y is just a few basis points away.

10Y UST: all eyes on the 2.27%/2.32% support zone

 

The 10Y UST has been forming a possible reversal pattern (Head and Shoulders) since last October and approached the confirmation level at 2.27%/2.32%. 2.27%/2.32% also coincides with the main channel support in force since late 2013 hence highlights this support zone is pivotal. Daily indicators are near multi-month floor hence they render it difficult to state whether this pattern will be confirmed. However, in the instance of 2.27%2.32% is breached, the sell-off would extend further, probably at a fast pace, towards 2.40% and 2.47% next. Near term, as hourly momentum indicators are also near a multi-month floor and positively diverging from prices a short-term pullback is set to happen to 2.15%/2.14%. A break above will mean a deeper retracement to 2.10%/2.08% and possibly even 2.02%/2.00%.

 

And this is where the 10Y is now:

 

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Wed, 05/06/2015 - 11:35 | 6065893 bnbdnb
bnbdnb's picture

Dividends still win.

Wed, 05/06/2015 - 11:40 | 6065917 Cognitive Dissonance
Cognitive Dissonance's picture

Do you know where your 10 year yield is? Do you care?

Wed, 05/06/2015 - 11:41 | 6065925 Xibalba
Xibalba's picture

I remember when 10k in savings paid my eletric bill..... Wake me when it's at 6% again

Wed, 05/06/2015 - 11:47 | 6065951 Soul Glow
Soul Glow's picture

When investing in Amerca made you money!

Ha!  What a world that must have been.  I wish there was something I could do with my money that would earn me interest that doesn't involve the stock market.  Bonds suck, cash sucks, gold and silver stays subdued - I of course continue to buy it tho - and the only option is the corporate stock market.

Give my earnings to corporations in hope this act creates savings?  Not when I know their P/Es and the rest of their books.  Nope, I'll just count my silver dollars once in a blue moon and buy when ever I have extra cash at the end of the month.

Wed, 05/06/2015 - 12:18 | 6066085 BandGap
BandGap's picture

I had I Bonds (US Savings Bonds) that had 5 - 6% yields back in the day.

Wed, 05/06/2015 - 11:43 | 6065933 Soul Glow
Soul Glow's picture

Everyone knows this is a sham, but nobody cares because as long as you can act nice and smile you can serve coffee.  We are what's left of the dying middle class and we want to achieve our dreams, not spend our precious time, and for it is precise, trying to overthrow a three headed monster.  We just want to relax!

- the Middle American

Someone's got to wear the knight's armor CD.  Yeah I know where the ten year is

;)

Wed, 05/06/2015 - 11:50 | 6065968 KnuckleDragger-X
KnuckleDragger-X's picture

I'll trade you my worthless paper for your worthless paper so I can make a gain of more worthless paper......

Wed, 05/06/2015 - 11:36 | 6065900 Dr. Engali
Dr. Engali's picture

Grandma Yellen says treasury yields are quite high. 

Wed, 05/06/2015 - 11:41 | 6065923 NoDebt
NoDebt's picture

Just doesn't get old, does it?

Wed, 05/06/2015 - 11:45 | 6065940 Dr. Engali
Dr. Engali's picture

Nope. It fits for every occcasion. Look at Baltimore:

 

Grandma Yellen says racial tensions are quite high.

 

 

See how that works? Awesome is it not?

Wed, 05/06/2015 - 11:49 | 6065958 NoDebt
NoDebt's picture

Ok, ok, let me try one.... Grandma Yellen says the corruption level in DC is quite high.

Well smack my ass and call me Susan.  It DOES work!

 

Wed, 05/06/2015 - 14:28 | 6066087 Dr. Engali
Dr. Engali's picture

Be careful how you use that. You'll hurt yourself if you use it wrong.

Wed, 05/06/2015 - 14:45 | 6066582 firewolfsblog
firewolfsblog's picture

Grandma Yellen says Colorado is quite high

Wed, 05/06/2015 - 11:51 | 6065972 KnuckleDragger-X
KnuckleDragger-X's picture

Three Stooges forever....

Wed, 05/06/2015 - 11:58 | 6065999 RadioactiveRant
RadioactiveRant's picture

Grandma? Thats a man baby!

Wed, 05/06/2015 - 11:37 | 6065906 madbraz
madbraz's picture

ask dudley where he wants the 10 year to be and that is where it will be.  apparently that's how it works.  on no news, on negative data, we've had a 40 basis point non-stop ride up that is triggered at 8:45 (first weeks) and now 10AM.  good riddance.

Wed, 05/06/2015 - 11:38 | 6065910 LawsofPhysics
LawsofPhysics's picture

The debt and unfunded liabilities are what they are...

tick tock motherfuckers...

Wed, 05/06/2015 - 13:20 | 6066278 rejected
rejected's picture

House Mortgage?

Car loan?

Credit Card debt?

School Loan?

 

Do most have the cash to pay them off,,,,, If not then they are all unfunded liabilities? No?

Wed, 05/06/2015 - 14:12 | 6066470 LawsofPhysics
LawsofPhysics's picture

Sure, but that's their problem.  Dumbasses should be living within their means.  Stop trying to "fix" stupid, it cannot be done and will just deplete all the resources you have.  Evolution is what it is, fuck em.

Wed, 05/06/2015 - 11:55 | 6065918 Soul Glow
Soul Glow's picture

The Fed continues increasing the POMO buy side bid at the current exponential rate - buy size is $40B every month for the POMO desk - so what becomes of the currency printed in aggregate to buy said bonds?  It devalues at the same rate.  

The diminishing returns of this investment by the Federal Reserve Bank, and make no mistake they are a bank and operate for profit, will outweigh the operating cost vs revenue and they will stop their purchases.  The FRB operates to fund the global cartel.  If they can no longer operate as the funding mechinism another will take over, like war for example.

Wed, 05/06/2015 - 12:00 | 6066009 LawsofPhysics
LawsofPhysics's picture

So, same as it ever was then?  There has never been an economic, political, fiscal, or monetary solution to resource scarcity.

Wed, 05/06/2015 - 12:12 | 6066061 Soul Glow
Soul Glow's picture

They can't continue their purchases at the current rate without declaring bankrupcy.  If the Fed folds the system is over.  If the Fed scales back and rates rise they could last another 5 - 10 years.

And by last I mean they would not be the biggest fish in the room.  The IMF wants that job and it will throw the ECB and the Fed under the bus to do so.

Wed, 05/06/2015 - 12:19 | 6066083 LawsofPhysics
LawsofPhysics's picture

The IMF, without the backing of congress and American military might, is useless.

Let them thow all the useless paper-pushing bankers, financiers, and their political puppets (now a political class) under the fucking bus, if they can.  It would be the best thing to happen to the world in quite a while.

Interesting times.

Wed, 05/06/2015 - 12:22 | 6066101 BandGap
BandGap's picture

Extremely interesting times.

The art is not to figure out what is going on but to accept what is going on. A sense of dread replaced by a sense of fascination. The grandkids will love the stories provided we make it there.

Wed, 05/06/2015 - 11:44 | 6065939 madbraz
madbraz's picture

that's not a head and shoulders, not even an inverse head and shoulders - not that i believe in this BS.  there is no left shoulder.

Wed, 05/06/2015 - 11:50 | 6065966 youngman
youngman's picture

I could not see anything in that graph....head and sholders my backside...I saw a pink elephant flying thru the clouds is all I saw

Wed, 05/06/2015 - 12:23 | 6066105 Winston Churchill
Winston Churchill's picture

Stick to just gin on your cornflakes.Or skip the cereal.

Wed, 05/06/2015 - 11:47 | 6065950 NoDebt
NoDebt's picture

OK, so I went to read some "Pro" article on CNBC (there's a green tag that says "Pro" next to it).  Gotta sign up to read them.  No biggie- give 'em my spam email and off we go.  But wait!  They want me to PAY MONEY for it.  And I don't mean like a buck or two.  We're talking about $300 for a year.

$300 FUCKING DOLLARS TO READ SOME PIECE OF SHIT CNBC ARTICLE THAT WAS PROBABLY WRITTEN BY A SECOND-RATE SELL-SIDE MOMENTUM TRADER??  YOU GOTTA BE FUCKING KIDDING ME!!

I think I'd rather subscribe to Gartman's newsletter.

 

Wed, 05/06/2015 - 11:49 | 6065964 Dr. Engali
Dr. Engali's picture

Grandma Yellen says the cost of CNBS articles are quite high. ;->

Wed, 05/06/2015 - 11:52 | 6065979 Soul Glow
Soul Glow's picture

YUP and here we just ask 

DONATE

http://www.zerohedge.com/donate

Wed, 05/06/2015 - 11:53 | 6065981 NoDebt
NoDebt's picture

That's fantastic.

Wed, 05/06/2015 - 12:02 | 6066018 Callz d Ballz
Callz d Ballz's picture

Right, at least with Gartman you know to do the exact opposite to be profitable.

Wed, 05/06/2015 - 12:51 | 6066192 walküre
walküre's picture

But do you believe in free advice?

Wed, 05/06/2015 - 11:48 | 6065957 youngman
youngman's picture

I am sure Yellen wants 15% interest rates.....then watch Obama start yelling at Yellen...I hope we hit 5 % before the elections....and the CDC has to come out with their bullshit figures to show how bad our budget is...

Wed, 05/06/2015 - 11:55 | 6065989 buzzsaw99
buzzsaw99's picture

transitory

Wed, 05/06/2015 - 12:00 | 6066007 papaswamp
papaswamp's picture

There goes oil....

Wed, 05/06/2015 - 12:04 | 6066029 NoWayJose
NoWayJose's picture

Look -- Up in the Sky!  It's a bird, it's a plane -- NO!  It's a bond Black Swan!

Lots of de-leveraging ahead, and I doubt the exit doors are big enough for the big banks that guessed wrong.  Grab your wallets and open them up so we can bail them out again! 

Wed, 05/06/2015 - 13:26 | 6066295 rejected
rejected's picture

Oh, come on!

They print up the money and call it a loan so the plebs won't catch on to the scam. They could take everybody's entire income and not come close to paying off the 'loans'.

And if they could, it would take so much money out of circulation there'd be one hell of a depression.

Wed, 05/06/2015 - 12:15 | 6066079 youngman
youngman's picture

But somehow Greece made a 400 million dollar payment to the IMF...how did that happen...

Wed, 05/06/2015 - 12:27 | 6066118 joego1
joego1's picture

Doesn't Grandma know that she is responsible for those "high valuations"? Must have a touch of Alzheimers setting in.

Wed, 05/06/2015 - 12:42 | 6066171 cn13
cn13's picture

The June 15 30-Year Treasury futures took out the March 6th low today.

Looks like it may be time for some FED market intervention.

Wed, 05/06/2015 - 13:28 | 6066301 rejected
rejected's picture

Double Posted somehow...

Wed, 05/06/2015 - 13:28 | 6066302 rejected
rejected's picture

Bullish...... BTFD

Wed, 05/06/2015 - 14:42 | 6066571 firewolfsblog
firewolfsblog's picture

3% here we come!

Wed, 05/06/2015 - 15:41 | 6066824 Lux Fiat
Lux Fiat's picture

Back in late April, when Abe was in DC and the nervous Japanese got reassurances that the US still had their back on the Senkaku islands et alia (http://www.zerohedge.com/news/2015-04-27/officials-warn-japan-take-more-assertive-military-role-senkakus-fall-under-us-japan-), I was wondering what form the Chinese blowback would take.  Would they issue a blustery statement denouncing it (if they have I haven't seen it)?  Or would they take a quieter, more indirect approach - perhaps taking a page from Rickards.  Or perhaps Xi has his hands full with decelerating growth, overleveraged gov't entities (quasi or otherwise) and the islands are no longer high priority.  Don't know, but have been keeping my eyes on the TNX and TYX since.

Wed, 05/06/2015 - 22:18 | 6067873 RMolineaux
RMolineaux's picture

Is this a case of two-handed chart readers, or is the bond bust underway?

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