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Shocker! Money Magazine Says 10 Year Yield May Hit 10%! 4/25/22

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Actually they said 3%. I had a little Freudian slip when I wrote that headline. 

3%. WOW! Ya think?

Needless to say, now that a bastion of mainstream media financial "journalism" has made that brilliant  deduction, no doubt the bond market is poised for a rally. Yes, the 10 year will hit 3%, but first they'll take a pound of flesh from those traders who are short the Treasury futures. 

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As for what we usually do here, day trade the stonks, we're going down down down. Down Down Down. We're going down down down now. 

The 5 day cycle projection on the ES S&P 24 hour futures is a nicely rounded 4200. 

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Here's the 5 hour bar perspective on that. As you can see, there's a nice sport convergence right at 4200 today. 

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No doubt we'll get a spirited rally from there as the shorts, godblessemeveryone, skim some profits. I'd like to see them grow some balls and hang in there so that we don't get these vertical rallies. That's coming, but the memories of the great departed bull are still too fresh for shorts to hold their positions with diamond hands. 

Meanwhile, in a matter of great import to me, because I live the Eurozone, the EUR just broke a 21 year trendline this month, and it's broken shorter term support this morning. I'm holding on to most of my dollar assets for now. The Fed's draconian tightening is removing dollars from the system leaving all those who borrowed dollars and must repay in dollars with a big short position in the dollar. That's bullish for dollars until the ECB and BoJ get tighter than the Fed. 

Gotta wonder when that will be. 

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If it stays below $107.50 today it could drop like a stone. If they recover above that, then a rally back to $1.09 or so would look doable. 

Despite this inflation, seems to me that a dollar shortage ain't great for the shiny yellow stuff either

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I don't think that it's great for BTC either. The level to watch on that is 37,000-37,500. If that gives way, then this is almost certainly the top of that bubble, with much lower prices ahead. 

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And for the big picture:

 

If you're serious about the underlying forces of supply and demand that drive the markets, join me

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Good morning...

There is plenty to comment on, everywhere you look there is something tantalizing to the eyes.  Gold and silver(and oil) are behind the woodshed and I hear screaming.  The currencies and bonds are at the edges(of insanity), the market is heading towards a very high cliff where many participants have already taken the plunge into huge gaps, huge declines, and huge margin calls.  To be forthright, at the swing...I expect a pause, but I also expect...a plunge.   I can go on and on here...it would never end. 

This morning...I'm going to pass on all of it and talk about something entirely different.

In 2000 and 2008...eventually the stick save came.  It will come this time too, but from my read of the tea leaves...it's going to be a double edged sword that exacerbates the issue.  Why?  Political leverage will demand it.  I personally believe the stick save at the bottom we're racing towards at break neck speed is what is going to exacerbate the economy into a new depression.  Oh...it'll look good for a time.  Perhaps, they'll even toss in a little stimmy as well.  Maybe a half-hearted attempt at some form of UBI?  I guess we'll have to wait and see.

It's still early in the game, but to be truthful...it's a bit later than most can imagine.  In the face of collapses within the Nasdaq that are beginning to rival 2000...I haven't heard many(if any) bear calls - AT ALL. 

Frankly, I find this disconcerting AND comforting at the same time.

This weekend I spent my time deep diving into the Nasdaq and frankly speaking...what I found is a literal nightmare unfolding.  Over the next few days/weeks.  I am going to start dissecting different stocks in the tech sector and bringing forward some behavior patterns that I see present over most of the issues that I've looked at.  It will help you going forward when you know what to look for in an issue that you're interested in.  

Twin peaks, double gaps...oh, the fun we'll have.

I will also be expanding on the idea of "measuring from the center" and begin to add dates(and comments) to the charts posted.  Please pay attention to the comments...I measure my words carefully.  You'll begin to see repetition...you'll also begin to see intent.  Huh?  Again.  Please pay attention, every single date I list is working towards an end. 

What end is that? 

Putting a sharp arrow into your quiver that no one can take away from you.

Best Regards,

The CoinGuy

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1 minute ago, The CoinGuy said:

I haven't heard many(if any) bear calls - AT ALL. 

Me, Tim, Sven. 

Well, maybe they don't count because they tend to be permabears. I was mostly bullish for 12 years. Not always, but most of the time. 

Trying to think who else.  Ah. Keith McCullough at Hedgeye.  He flipped big time. Very bearish now. 

Who else? None of the guys on teevee, for sure.  

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Doc...

I apologize for not mentioning you...I thought that would be a given.  Smile.

These other characters...I've never heard of. 

I actually had to pull my assistant off his bond research last week and have him peruse the internet looking for "credible" bear names.  He came up with one former anal cyst who used to be interviewed on the old CNBC here and there back in prior bear markets.  He felt the name and his comments toward the market were worthy of a mention.  Although he felt the gentlemen was hedging his statements.  

I guess it's at this point I should mention,  I have always insulated myself from ANY financial punditry.  The same as my father before me.  I also don't read newspapers.  Television?  No...all of my properties are television free.  Surely you. No. I do nothing associated with markets - at all. 

In fact...I use ZERO actual technical analysis when determining where I feel the market is headed.  I use a homebrew method that given enough practice eventually allows you to just put the charts down and enjoy life before it passes you by.

The charts I post are just ART.  Pictures I come up with as representations of my own thoughts toward the past, present, and future. 

Nothing more than...an expression in time.

I'm a poet and a dreamer Doc.

Best,

TCG

 

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9 minutes ago, BreakOut said:

“Money Magazine Says 10 Year Yield May Hit 10%! 4/25/22”

 

Textbook headline for a counter-trend rally, even if it turns out to be right.

Actually they said 3%. I had a little Freudian slip when I wrote that headline. 

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Euro losing its shit again. Just broke the low. Threatening to break 1.07. I don't think in the 6 1/2 years I've been coming over here I've ever seen it this low. 

Inflation? What inflation? The Doolah is strong! It buys me more every day. 

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I admit, that prices in euros are going crazy. Feels like sticker price of everything here is up 10% since I arrived in France at the end of January. 

I locked in a price on the apartment I bought in mid March. I won't close until July. By then I could flip for a profit, even with the insane 8% closing costs here.  

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A "weaponized" dollar into a stock market decline.  There's a first for everything I suppose...

For me, cash is a solid position "right now", but there may be better more suitable options - later. 

I can only short so much. 

As I mentioned...I believe a person slowing down their decisions here is the best thing they can do for themselves.  From my perspective...this will not be a one and done, but will unfold in several steps.

I plan on taking one step at a time...and I will have outlined my approach to each step(ad nauseum) before we actually reach our destination.

What's the use of ANY information, if you're too late to the party to take advantage...

Best,

TCG

oh...and...

DJI now down over 400. 

A couple of hundred more...let's say 33,200 and I'd like to see it slow down some and build cause above the swing point...then crack it hard.  Even a failure after the crack and a retest would be nice and not out of the ordinary.  Then a plunge or two just to make sure people are paying attention. 

Ah...we'll see soon enough.

For the moment, I've been watching MSFT(I do NOT like this company) just sitting above the swing point resting.  I'm very curious as to what is on the mind of MSFT this week.  Why?  Because the Nasdaq will shortly follow.  They're traveling together like peas in the same pod.

I guess I should mention...

A "small" window opens on Wednesday the 28th and closes Friday evening.  Everytime I say it's a small window, meaning perhaps...not a lot of energy I seem to get taken to task so...I'll just say this instead.  When windows are open.  The energy will come right as it opens, hard spike at dead center...or as it's withering to the end.  There's really nothing else to it. 

The next one is May 9-10.

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Lee,

Many are pointing to no Fed tightening so far (only 25 bps). However, with money not leaving RRP. Has this become the de facto tightening? You have been on this from the beginning. My guess is they will use this at some point for the stick save.

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18 minutes ago, potatohead said:

Lee,

Many are pointing to no Fed tightening so far (only 25 bps). However, with money not leaving RRP. Has this become the de facto tightening? You have been on this from the beginning. My guess is they will use this at some point for the stick save.

This has been the most draconian tightening in the Fed's history, and it is about to get worse. 

I can't begin to fathom how little these "experts" understand, or are willing to even try to understand. As I've reported for years and years, it's about the supply of money relative to the demand for money. Relative to what was, what currently is, and what will be. They ignore all of that. They ignore the Law of Supply and Demand. 

At zero QE the Fed is the tightest it has ever been in its history relative to the demand for money, primarily money demand from the US Treasury. Money demand from the US Treasury is represented by the supply of Treasury securities. This is the measure of the US government's demand for credit. 

The Fed previously funded directly or indirectly an average of 85-90% of the  new Treasury supply. Now it's funding, effectively a little above zero, and it will go negative when it starts to shrink the balance sheet. In other words, it will add to supply and even further restrict demand. 

Tons of Cash, Not In Use, Signals this Huge Change in the Market 

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6 minutes ago, potatohead said:

Lee,

Many are pointing to no Fed tightening so far (only 25 bps). However, with money not leaving RRP. Has this become the de facto tightening? You have been on this from the beginning. My guess is they will use this at some point for the stick save.

I've also written that the price of money is just the measure of how tight monetary policy is. Fed rate setting is a sideshow to the real business of reducing the supply of money and credit. I've posted this chart to illustrate that the Fed really just rubber stamps what the market has already done. 

tvc_3d7a7b1e019d08e84a3b632cf4f73d52.png

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