DrStool Posted October 21, 2022 Report Share Posted October 21, 2022 I have been warning about this for months and months. In fact, I started warning about it in August of 2020, and have never stopped. In recent months, I've written: Quote 7/18/22 As we know, the supply conditions are benign until mid August. So if the 10 year yield holds above 2.72 for the next 3 weeks, then I think we can expect an upside breakout after mid August. 9/15/22 The 10 year yield is once again on the verge of another upside breakout. If it clears 3.50, the conventional measured move target of the enormous base pattern would then be 6%. And I don’t think it would take years to get there. It only took two months to go from 1.65 to 3.25, a distance of 1.6%, a 97% increase. A breakout from the current level could ignite a wave of bond liquidation the likes of which we have never seen. https://liquiditytrader.com/index.php/2022/10/21/bears-beware-treasury-buybacks-will-turn-the-markets-sooner-not-later/ The conditions that led to this have been obvious, not just for months, but for the past two years. It's not rocket science, it has been obvious if you are paying attention to the right data. Wall Street makes a point of constantly misdirecting you to follow things that are simply irrelevant at best, misleading, or outright lies and subterfuge at worst. Its only job is to keep you feeding at their poisoned trough. The US Treasury is readying emergency measures, going through the motions of asking its Primary Dealer network whether there's a problem out there, as if they didn't know. What a joke. Hey, mofoclowns, look at this. If you're serious about trading and investing successfully, then pay attention to the things that matter the most. I promise to keep you focused on them, and make them as obvious as humanly possible. Meanwhile for you day trading junkies, on this thread we focus on the mundane day to day chart squiggles and of course, whatnot. Where would we be without the whatnot. So here's our usual look at the hourly ES, 24 hour S&P futures. As of 6 AM New Yanks time, the 5 day cycle projection looks pointed at 3610. But there's an obvious sport line at 3635. If that's broken, it opens a chasm to around 3575. With the pressure the bond market is exerting this morning, I like the bet that stocks will get that far. Bears Beware, Treasury Buybacks Will Turn the Markets, Sooner Not Later October 21, 2022 Swing Trade Screens – Overloaded on the Short Side October 17, 2022 On the Edge of the Abyss, Can the Market Fly? October 17, 2022 We Now Know When and Where Gold Will Bottom October 14, 2022 We Can Now Project When Fed Will Pause, But Not Reverse October 13, 2022 Look Out For the Real Fallout of Declining Withholding Tax Collections – Part 2 October 6, 2022 Look Out For the Real Fallout of Declining Withholding Tax Collections October 5, 2022 Markets Face Catastrophe as Dealers Mitigate Too Little Too Late September 26, 2022 Fed Speeds Into Dead Man’s Curve, More Black Tuesdays Ahead September 15, 2022 There Will Be More Black Tuesdays September 14, 2022 If you're serious about the underlying forces of supply and demand that drive the markets, join me! If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter. Link to comment Share on other sites More sharing options...
The CoinGuy Posted October 21, 2022 Report Share Posted October 21, 2022 51 minutes ago, DrStool said: Wall Street makes a point of constantly misdirecting you to follow things that are simply irrelevant at best, misleading, or outright lies and subterfuge at worst. Its only job is to keep you feeding at their poisoned trough. If you listen hard enough, you might just hear the standing ovation from Nebraska. Hence my ever repeating comment on inversions, or as Doc puts his finger right on it...misdirection. The most used tool in their arsenal... As I've mentioned...I normally don't watch bonds or bond yields(or currencies) on a daily basis. I have enough on my plate as it is. I also have an expert sitting several feet to my right who is at my beck and call 24/7 if need be. Although. With that said...I saw Doc's 10yr chart yesterday and at first glance I was thinking to myself that looks an awful lot like a cup and saucer pattern coming out of that hole in the 10 year, then I started seeing the reverse H&S patterns and I thought I might need to take a closer look. Now...by closer look I mean the Monthly Chart. For me...that's where it all starts. So I pulled up the Monthly back to the 1980 peak. The first thing I saw was this... And frankly...it's the last thing I need to see. Although...I will add the Weekly Chart here for a tad closer look. So...why am I drawing one line under this particular area of the chart? Charts are incoming. I believe after viewing those charts...no explanation will be necessary. No explanation will be necessary in the ^HUI and Silver either... Best, TCG Link to comment Share on other sites More sharing options...
fxfox Posted October 21, 2022 Report Share Posted October 21, 2022 They would just have to alter the Basle III SLR requiremtents to bring back liquidity into the system. The Fed, Basel III, and SLR (natlawreview.com) Pretty sure they gonna do this. Link to comment Share on other sites More sharing options...
PullMyFinger Posted October 21, 2022 Report Share Posted October 21, 2022 What the heck was that spike about? OpEx shenanigans? Link to comment Share on other sites More sharing options...
PullMyFinger Posted October 21, 2022 Report Share Posted October 21, 2022 Never mind. Words. Blah blah blah. Futures rebounded off their lows after the Wall Street Journal reported that some Federal Reserve officials were growing uneasy with the current pace of rate increases and are starting to worry about the risks of overtightening. https://www.cnbc.com/2022/10/20/nasdaq-100-futures-slide-after-major-averages-register-two-days-of-losses.html Link to comment Share on other sites More sharing options...
sandy beach Posted October 21, 2022 Report Share Posted October 21, 2022 Just now, PullMyFinger said: Never mind. Words. Blah blah blah. Futures rebounded off their lows after the Wall Street Journal reported that some Federal Reserve officials were growing uneasy with the current pace of rate increases and are starting to worry about the risks of overtightening. https://www.cnbc.com/2022/10/20/nasdaq-100-futures-slide-after-major-averages-register-two-days-of-losses.html WSJ editor was growing uneasy with the current pace of rate increases and starting to worry about the risk to his portfolio of overtightening and conjured up fictional "sources" to move the market up again. That's more like it. Link to comment Share on other sites More sharing options...
Jorma Posted October 21, 2022 Report Share Posted October 21, 2022 Kind of a dumb question but the Treasury will by buying Treasures at market price, right? Link to comment Share on other sites More sharing options...
potatohead Posted October 21, 2022 Report Share Posted October 21, 2022 Sign of a Fed Pivot: Todays sharp reversal in (the super shorted) JPY & higher precious metals being pinned on a @NickTimiraos article ( a 'Fed mouthpiece'). The Nov "meeting could serve as a critical staging ground for future plans, including whether and how to step down to 50 basis points in December". So if this is the last supersized 75bp hike, its enough visibility for Gold to hold into physical floors currently at $1620 and Silver ~$18.50 Link to comment Share on other sites More sharing options...
fxfox Posted October 21, 2022 Report Share Posted October 21, 2022 5 minutes ago, potatohead said: being pinned on a @NickTimiraos article ( a 'Fed mouthpiece') They used him before to send messages to the market. I would not ignore that totally. It will start with "words". That's how QT satarted too. Link to comment Share on other sites More sharing options...
SiP Posted October 21, 2022 Report Share Posted October 21, 2022 so a pivot begin. now 75bp and then slower hikes let the OCT rally begin Link to comment Share on other sites More sharing options...
DrStool Posted October 21, 2022 Author Report Share Posted October 21, 2022 Nonsense. Money talks. Bullshit walks. Anybody who buys into this shit will get hammered Link to comment Share on other sites More sharing options...
sandy beach Posted October 21, 2022 Report Share Posted October 21, 2022 41 minutes ago, Jorma said: Kind of a dumb question but the Treasury will by buying Treasures at market price, right? I believe the way it works is that the Treasury Borrowing Advisory Committee (TBAC) at their next meeting on November 1st would announce a plan for reverse auctions to buy back longer dated illiquid bonds. Normally they would fund this by issuing more short dated bills in the same amount. This time they have so much money in the Treasury General Account at the Fed from tax receipts they may for now just decide to buy bonds outright without issuing new bills. But the market could use more bills - so dunno. I'm sure doc will correct me if I'm wrong. Link to comment Share on other sites More sharing options...
Jorma Posted October 21, 2022 Report Share Posted October 21, 2022 4 minutes ago, sandy beach said: I believe the way it works is that the Treasury Borrowing Advisory Committee (TBAC) at their next meeting on November 1st would announce a plan for reverse actions to buy back longer dated liquid bonds. Normally they would fund this by issuing more short dated bills in the same amount. This time they have so much $ at in the Treasury General Account at the Fed from tax receipts they may for now just decide to buy bonds outright without issuing new bills. But the market could use more bills - so dunno. I'm sure doc will correct me if I'm wrong. Sure but I was getting at that anyone who sells their Treasuries now will have to book the loss. As far as it being bullshit, two or three hundred billion new demand in the market can do a lot of good for bids. Of course it's just talk at this point, They better move fast. Link to comment Share on other sites More sharing options...
sandy beach Posted October 21, 2022 Report Share Posted October 21, 2022 1 minute ago, Jorma said: Sure but I was getting at that anyone who sells their Treasuries now will have to book the loss. As far as it being bullshit, two or three hundred billion new demand in the market can do a lot of good for bids. Sorry I corrected some typos after you quoted me. Correct, they would have to take the loss up to this point but the auctions would tend to stop future losses and tend to reduce the interest rates of these specific bonds while pushing up bill rates (assuming they issues bills to compensate). Link to comment Share on other sites More sharing options...
sandy beach Posted October 21, 2022 Report Share Posted October 21, 2022 1 hour ago, fxfox said: They would just have to alter the Basle III SLR requiremtents to bring back liquidity into the system. The Fed, Basel III, and SLR (natlawreview.com) Pretty sure they gonna do this. Spot on! Link to comment Share on other sites More sharing options...
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