Loading ...Have you heard the news? US Treasury bonds are sky rocketing as it turns out there is no inflation amid a global central bank NIRP-a-thon and race to the currency bottom. Going the other way, our 30yr Treasury yield Continuum is burrowing southward.
If you check out yesterday’s post you’ll see proof that the 2018 NFTRH view that people should tune out the bond experts instructing BOND BEAR MARKET!! was 100% on target.
But today the din is coming from the opposite pole. Everywhere you look on the financial websites it’s now about tanking yields, decelerating growth, trade war damage and deflation. Here is the 30 year bond yield (TYX), which is front and center in this hysteria (click the charts below for the clearest view). That is one impulsive looking drop.
But just as we warned that the precious metals move was a “launch”(not a blow off as some were calling it) in June because it was at the beginning rather than the end of an extended move, we note that TYX is impulsively dropping into a potential climax. Everybody is on the opposite side of the boat they were on in H2 2018. That would be the BOND BEAR MARKET!! side of the boat with experts Gross, Gundlach and company.
Now amidst the current Armageddon (the SPX is after all down a whole 4% from its all-time high, he said sarcastically) backdrop it’s all BOND BULL MARKET!!all the time.
Wash…
Rinse…
Repeat… the herds never catch on because they are the herds. They follow. Always.
While it does not always work this way, since gold often plays well with inflation and bonds do not, during this slight global economic growth contraction gold has acted as have Treasury bonds in almost perfect sync. Here, check out the daily chart of the yield and gold.
The green dashed lines on this weekly chart show phases where gold and 30yr yields were mostly correlated, which meant that gold and Treasury bonds were not. That relationship is violently interrupted on this cycle of fear, loathing and Armageddon obsession.
But maybe this IS the big one (Elizabeth!). The Continuum has declined to the lows reached during the NIRP hysteria back in 2016 and the stock market correction before that in 2015.
Armageddon ’08? Yields are below that terror stricken event and the 2012 launchpad to the financial media’s “Great Rotation”(out of bonds and into stocks) promotion of 2013.
This critical area of support is as important in a completely different way than the aborted breakout (orange arrow) above the Continuum’s limiter was last year.
This is from the excellent NFTRH–I think this. is one of the best advisors out there
Filled Buy to Open 200 TBF Mar 20 2020 21.0 Call Limit 0.15 — — 09:44:22 08/13/19–ProShares Short 20+ Year Treasury (TBF)
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