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BONDS: A Great SHORT Trade for 2013? Late 2016?

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The UPTREND in 10 year T-Note rates has recently been Confirmed

 

The brief rally in Bonds may be ending, and rates may head back up

towards 3.00% and beyond.

 

 

All Data for TNX shows this

 

vkoj.gif

THE WEEKEND IS OVER - back to normal mode here ...

 

Here's XLF, Fidelity's etf for financial shares ... 3-years

 

eg43.gif

 

Notice how the price broke above the "cluster" of MA's in Seot. 2012.

 

This long term chart is still in an uptrend.

But It will turn down some months before a break of the MA's confirms the new downtrend

 

Here's TLT, the etf for Treasury Bonds ... 3-years

 

pb1f.gif

 

Here you see that the 76d-MA has just broken below the 987d-MA

 

In my mind, this is CONFIRMING that a Bear Market in Bonds is now underway.

It might not be long before rising Bond yields will visit some losses on bank balance sheets.

 

TNX - 10-year Note Rates - update

 

zqy.gif

 

A new Uptrend has just been confirmed.

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Is the BOND BOUNCE done?

 

 

TLT could not even reach its falling 144dma, and now seems to be getting dragged back down.

 

The US 10yr treasury rate fell from 3% to 2.5% off the back of the bounce, but is now threatening to climb again.

It will be interesting to see if it can move to a higher high in the next couple of months.

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DOLLAR and BOND to SLIDE together ?

 

( Jim Willie on the Schiess Dollar)

 

VICIOUS CYCLE & DOWNWARD SPIRAL

 

The USFed response will be to print money to cover the sales of USTBonds, but done with a discount which has already begun in force. The debasement of the USD from rampant money supply growth will exacerbate the situation. Foreign USTBond holders will rush to sell more, thus fueling the downward spiral. The USFed will print even more money to compensate in the bond monetization, probably done in hidden fashion to hide the monstrous QE volume increase. Then comes the full blown currency crisis, which in my view will result in a currency split. The USGovt with its USFed masters will decide to split the currency. They will tell the foreigners that the external USDollars retain value, but a new Scheiss Dollar (aka Shit Dollar) will be distributed in order to pay for imports from foreign suppliers. It will be devaluated, in order to encourage its acceptance and to assure incoming supply. The foreign USTBond selling will slow down, and even halt, only when the USFed promises to redeem with original USTBonds in cash. The foreigners will use the cash to buy other major currencies and Gold Bullion, and certainly not swap into the new Republic Shit Dollar.

 

The Chinese will take control of the Federal Reserve, and assume responsibility for management of foreign held USDollars, with some assistance by the Intl Monetary Fund. The IMF already has a Chinese dominance. The USDept Treasury late last year took back control of certain USDollar responsibility. Doing so set the stage for launch of the Scheiss Dollar, while the Chinese had been busy with acquisition of the JPMorgan headquarters in South Manhattan. The split oversight has already taken root.

 

As the perception spreads like a virus that the new Scheiss Dollar will see deep devaluation on a repetitive basis, the torrent will be directed toward conversion of major nation sovereign bonds into Gold bullion. From 2009 to 2012 the PIGS took the headlines. Next the US, UK, and Japan will make headlines for trouble in sovereign bonds. As the perception spreads like a virus that the major currencies all suffer from the central bank debasement problem, the conversion of Euros, British Pounds, and Japanese Yen will all be directed toward Gold Bullion. Their sovereign bonds will undergo separate simultaneous crises, all perceived as toxic paper. The recognition of Gold Trade Settlement will be common, its practice born in a simultaneous stroke. The momentum into Gold Bullion will be staggering, secret, and robust, led by the BRICS Bank (aka Gold Trade Central Bank).

. . .

INDIRECT EXCHANGE DUMPING OF USTBONDS

The indirect exchange concept will continue to accelerate. A quick review around the world can identify a wide range of locations for the discharge. The USTreasury Bonds are being used as currency by third parties (mostly China & Russia) to pay for large assets sales and energy purchases. The USGovt bonds are being dumped. A race will develop to convert the USTBonds before a final restructure writedown. In past Hat Trick Letter reports, some major Indirect Exchange routes had been identified. The biggest two were the Rosneft buyout of the British Petroleum stake in the TBK-BP huge Russian energy firm for $55 billion. The deal will see the Russians unloading those $billions in USTBonds, sent to London banks where they cannot be refused. The other large deal is to be the payment by China for Russian crude oil delivered via the vast network of Asian pipelines. The Chinese will pay the huge annual energy bill in USTBonds, a steady discharge.

 

The Indirect Exchange usage of USTBonds will contribute to the external pressure on the USDollar, from which the USGovt will be forced to ramp up the QE volume in bond monetization, and then split the USDollar for a domestic currency that is heavily devalued. The radical action will take place as the USD is dropped from global reserve status. Several creditor nations will follow suit in the Indirect Exchange movement, including Brazil, Japan, Hong Kong, Taiwan, Thailand, Singapore, South Korea, Luxembourg, Norway, and Ireland. The exchange of bonds will grow and become a global stampede, then a race to extract value before the USTreasury Bonds default and convert to 65 cents on the dollar during a Global Restructure Conference, with the USMilitary having a seat to ensure cooperation and compliance (with a smile). The Jackass forecast of a USGovt debt default made in late 2008 is slowly taking shape.

==

 

>http://www.24hgold.com/english/news-gold-silver-the-split-birth-of-new-scheiss-dollar.aspx?article=5187155494H11690&redirect=false&contributor=Jim+Willie+CB&mk=1

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May 05, 2014

Yves Calls a Bond Panic

Bond rates have dropped, surprising the herd, which had expected a continued rise as the Fed tapers. Yves Lamoureux, the New Bond Guru, has put out a new report: Where are bonds headed for 2014. He expected, since February, the long bond to drop to 3.25% this summer before snapping back to higher rates.

TYX / 30yr-TBond ... update

 

TYX_zps12efcff8.gif

 

In 2012 Yves called the end of the 30 year bond bull market. He was called the New Bond Guru for calling it correctly while the Old Bond Guru (Bill Gross) was still predicting bonds to rise and rates to drop. A year later in August 2013, after a rise and rates and then a drop, he put out an important bond call that bond apathy was ending and a bond panic would set in as rates were to rise again. After a 30-year drop in rates, the long bond rose from around 2.5% to over 4% in less than two years, an astounding change that Yves predicted too. The ten-year bond rose from 1.6% to over 3%. Now rates are falling and a short-term panic (rush to buy) may push them further down.

 

Yves commented to me that with all this money going around clueless, the next big trend he sees has nothing to do with Wall Street's current obsession about a slowdown and deflation. He sees a large reflation on the horizon that will surprise everyone again!

 

> Planet Yelnick: http://yelnick.typepad.com/yelnick/2014/05/yves-calls-a-bond-panic.html

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New relative indicator : Gold looks cheap

 

GLD-to-TLT Ratio (that's Gold-to- Bonds):

 

A_zpsd54cd977.png

 

It suggests that GLD may be set for a good rally, especially if Bonds continue to rise.

 

Here they are on the same chart ... update: start-14May2010

TLTvGLD_zps9f909794.gif

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Cross-currents : US Bonds are peaking... Or ARE they?

 

TLT / etf for T-Bonds ... update

 

TLT_zps2kxcwzuz.png

 

(1) End of US bond rally looms, as Fed gets ready for Rate Rally, says David Brown, in SCMP's MACROSCOPE column.

"The 34 year rally in US bonds is coming to the end of the line"... "The end of the party is near"

"Pretty soon, the Fed will have to commit to higher rates"

The evidence?: It dropped the word: "patient" from its rate guidance.

Inflation has been skewed by low oil prices.

 

(2) Bonds bind the Fed - but New Low in yields is expected later this year

Elliotwaver Nicole Elliott thinks interest rates may have peaked for the year (T-Bonds at just under 2.9% in early March)

They are now at just over 2.5%... and she sees the March high as ending an A-B-C up

She thinks they will go thru the low on 2.443%, and later this year, take out the record low of 2.221% (= TLT high of XX ?)

 

(3) Neal Kimmerley in today's SCMP sees:

"A Million reasons why the Dollar is still a good bet", and mainly:

"Even if the Fed sits on its hands, it is still tighter than the Euro or Japan"

 

Some CB's what the Fed to stand still, so they can cut rates... such as Australia

 

===

NOTE: Nicole Elliott has a good track record with her E-Wave charts

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IYR might be a good Put-buying Target, and a proxy for TLT ... update / Last: $82.04

aa_zpsdj9hhpoe.gif

 

===== : Jan.2016- mid pt : -Jan.2017 -- mid pt : %/$82
85 put : 7.45-8.20: $7.82 : 11.15-12.25: 11.70 :
82atm : ----------- > $6.15 : $9.35-10.40: $9.87 : 12.0%
80 put : 4.80-5.25: $5.03 : $8.30-$9.30: $8.80 :

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Global Bond Rout Sends Futures Tumbling, Bund Has Sharpest Weekly Selloff In History

05/07/2015

 

To get a sense of why futures are sliding right now, and what every global trader of any asset class is looking at right this moment, look no further than the chart below which shows what is going on with German Bunds yields.

 

Bund%2010Y_0.jpg

 

As DB and Reuters conveniently point out, this is the biggest and fastest weekly drop in Bund history.

 

BUNT / DB 3x German Bund Futures ETN ... update

BUNT_zpsehfdlvvb.gif

 

The catalyst for today's plunge was weak French OAT auction, which saw yields rise and bid/cover ratios decline at 2023 and 2025 bond actions. "The big fallout in core fixed income occurred after a very soft French auction with a large tail which collapsed the market again," according ED&F Man head of U.S. rates Tom Di Galoma writes in note. But while there was an immediate cause, what really happened was a continuation of the selling momentum seen in the past two weeks.

. . .

However, the epic rout it has since gotten following some serious public and private sector jawboning, is precisely the opposite of what the ECB wanted which needed a smooth, controlled descent, and the sheer speed and size of the selloff is why Draghi may have no choice but to step in soon with some verbal intervention and declare that Bund yields, which are now well above where they were when Q€ started, will be pushed lower "whatever it takes."

==

>more: http://www.zerohedge.com/news/2015-05-07/global-bond-rout-sends-futures-tumbling-bund-has-sharpest-two-week-selloff-history

 

( Headlines ):

 

BOND SELLOFF DEEPENS; GERMAN 10-YR YIELD JUMPS 17 BPS TO 0.76%

SPANISH 10-YEAR BOND YIELD CLIMBS TO 2%; HIGHEST SINCE NOV. 24

ITALIAN 10-YEAR BOND YIELD CLIMBS ABOVE 2%; 1ST TIME THIS YEAR

10Y TREASURY YIELD CLIMBS 6BPS TO 2.31%, HIGHEST SINCE DEC. 8

U.K. 10-YR BOND YIELD CLIMBS 8 BPS TO 2.06%; MOST SINCE NOV. 24

IRISH 10-YEAR YIELD RISES ABOVE 1.5%, FIRST TIME SINCE NOV. 21

JAPAN 10Y YIELD UP 7.5 BPS, SET FOR BIGGEST RISE SINCE MAY 2013

INDIA'S 2024 BOND YIELD CLIMBS 9 BPS TO 7.98%

 

Meantime, as the FT points out:

"When it comes to selloffs, it is hard to beat the deeply illiquid Spanish 50 year,

the price fell by 20 percent at its worst point yesterday."

 

JP: NIK / Nikkei-225 ... all-Data

NIK_zpsj6z2nrzs.gif

 

Historical similarity - like Japan bonds in 2003:

"The 10-year Japanese bonds hit its then-record low in June 2003, after a remarkable low-volatility rally. Just as with this year's Bund rally, Japan led global bond yields down, even as the Fed was discussing raising rates..."

"The bust was remarkably similar to the past three weeks in Bunds. It started slow, then a big selloff, a pause, a series of big selloffs and then a wipeout mostly reversed within the day. The overall drop was very similar, at 5-6 percent, though Japan took 17 days, against Germany's 13."

"There was some good news... Japanese shares rose with yields in 2003." (however, Japan shares were cheap and out of favor, when the rally started.) - FT, pg. 13

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"Exaggerated" ETF's show USD and Euro bonds are moving together (with similar turnpoints)

 

BUNT (3x German Bond) versus LBND (3x US 25 year)

 

BUNT vs LBND ... update

BUNT-vsLBND_zps5vs2mjuz.gif

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Mike Maloney-Bond Bubble Bust Will Be Devastating

 

Here's a look at TLT ... All Data

TLT-all_zpsfc0bo8nv.gif

...

Notice a number of turns at/near year-ends.

 

It will be interesting to see if TLT goes to a high or low end of a trading range on 12/31/2015

 

A bond rally, together with a "Santa Claus" stock rally, might set markets up for a big turn in 2016

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Global Property : UBS is calling a peak...

The Swiss bank UBS - an even bigger player with $2 trillion under management - has issued its own gentle warning on bonds as the US Federal Reserve prepares to kick off the first global tightening cycle since 2004. UBS expects five rate rises by the end of next year, 60 points more than futures contracts, and enough to rattle debt markets still priced for an Ice Age.

Mark Haefele, the bank's investment guru, said his clients are growing wary of bonds but do not know where to park their money instead.

The UBS bubble index of global property is already flashing multiple alerts, with Hong Kong off the charts and London now so expensive that it takes a skilled worker 14 years to buy a broom cupboard of 60 square metres.

http://www.telegraph.co.uk/finance/economics/12014821/Elite-funds-prepare-for-reflation-and-a-bloodbath-for-bonds.html


http://i.telegraph.co.uk/multimedia/archive/03509/ubs_bubble_3509191b.jpg
ubs_bubble_3509191b.jpg

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Junk bonds have a serious warning for stocks

 

 

Why the junk bond selloff is getting very scary

Published: Dec 11, 2015


High-yield bonds have led previous big reversals in S&P 500

MW-EB083_Hallow_20151211124813_ZH.jpg?uu
Junk bonds are like the boogeyman for stock market investors.
tomiKilgore_100.png

By

TomiKilgore
Reporter

The junk bond market is looking more and more like the boogeyman for stock market investors.

The iShares iBoxx $ High Yield Corporate Bond exchange-traded fund HYG, -2.00% dropped 2% on Friday to close at the lowest price since July 17, 2009. Volume 54.1 million shares, or nearly six times the 30-day average of 9.5 million shares, according to FactSet.

See also: 5 things that show the junk bond market is in big trouble

While weakness in the junk bonds -- bonds with credit ratings below investment grade -- is nothing new, fears of meltdown have increased after high-yield mutual fund Third Avenue Focused Credit Fund TFCIX, -2.86% TFCVX, -2.70% on Thursday blocked investors from withdrawing their money amid a flood of redemption requests and reduced liquidity.

This chart shows why stock market investors should care:

MW-EB066_MHCAX__20151211104257_MG.jpg?uuFactSet

When junk bonds and stocks disagree, junk bonds tend to be right.

The MainStay High Yield Corporate Bond Fund MHCAX, -0.74% was used in the chart instead of the iShares iBoxx ETF (HYG), because HYG started trading in April 2007.

When investors start scaling back, and market liquidity starts to dry up, the riskiest investments tend to get hurt first. And when money starts flowing again, and investors start feeling safe, bottom-pickers tend to look at the hardest hit sectors first.

So it’s no coincidence that when the junk bond market and the stock market diverged, it was the junk bond market that proved prescient. Read more about the junk bond market’s message for stocks.

 

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The "Crazy Growth In Corporate Debt" Is Finally Noticed: Bloomberg Issues Stark Warning

By now it is a well-known fact that corporations have no real way of generating organic profit growth in this economy (the recent plunge in Q1 EPS was a stark reminder of just that), so they are relying on two things to boost share prices: multiple expansion (courtesy of central banks) and debt-funded buybacks (also courtesy of central banks who keep the cost of debt record low), the latter of which requires the firm to generate excess incremental cash. Incidentally, as SocGen showed last year, all the newly created debt in the 21th century has gone for just one thing: to fund stock buybacks.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015/11/socgen%20buybacks%201_0.jpg
socgen%20buybacks%201_0.jpg




SOCGEN:

One doesn't have to be a financial guru to grasp that the problem with this "strategy" is that if a firm is going to continue to add debt to its balance sheet in order to fund buybacks (and dividends), then it needs to be able to generate enough operational cash flow in order to service the debt. Even if one makes the argument that debt is cheap right now, which may be true, or that central banks are backstopping it, which is certainly true in Europe as of the ECB's shocking March announcement in which the CSPP was revealed, the fact remains that principal balances come due eventually, and while debt can be rolled over, at some point the inability to generate cash from the operations catches up; furthermore even a small increase in rates means the rolling debt strategy is dies a painful death, as early 2016 showed.

Then, as we showed to months ago using another stunning chart from SocGen's Andy Lapthorne, what has gone largely unnoticed in the recent past, is that the differential between the growth rate of net debt and underlying cash flow or EBITDA, now at a staggering 35%, have never been greater, and in fact "Debt Is Growing Faster Than Cash Flow By The Most On Record." As Andy Lapthorne politely put it in the chart below, there is "crazy growth in net debt."


http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/crazy%20growth%20net%20debt_0.jpg
crazy%20growth%20net%20debt_0.jpg



One also does not have to be financial wizard to to know that a firm which has to borrow more than it can generate from core operations is not a sustainable business model, and yet today's CFOs, pundits and central bankers do not.

But more are starting to notice, as the corporate debt pile hits unprecedented proportions.

As Bloomberg writes this morning, when it also issued a stark warning about the next source of credit contagion, while "consumers were the Achilles’ heel of the U.S. economy in the run-up to the last recession. This time, companies may play that role."

Among the warning signs: rising debt, lagging profits and mounting defaults. While the financial vulnerabilities aren’t likely to lead to another downturn soon, economists say they point to potential potholes down the road for an expansion that’s approaching its seventh birthday.

The chart below, very familiar to frequent Zero Hedge readers, is the reason why the next debt crisis will be one where corporations, not individuals, are dragged down. It shows that enticed by record-low interest rates, companies increased total debt by $2.81 trillion over the past five years to a record $6.64 trillion. In 2015 alone, liabilities jumped by $850 billion, 50 times the increase in cash by S&P’s reckoning.


http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/05/13/corporate%20debt%20bbg_0.png
corporate%20debt%20bbg_0.png

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The Most Important Market in the World.
Are We at a Tipping Point? Friday August 19, 2016 16:05

jay_20160819_1.jpg

Above is a 25-year chart of the U.S. T-Bond market. Of course the bull market extends at least 10 years further back than what is shown above. When Volcker exercised just a small amount of discipline by taking his foot off the gas pedal during the stagflationary 1970s, T-Bond rates rose to over 14%! My first mortgage was 17.5%.

jay_20160819_2.jpg

 

There may have been at least a little authenticity in the debt markets in the late 1970s. True, the double-digit inflation of the 1970s was caused by Nixon’s bastardizing the global monetary system by removing gold from the dollar. Up until 2008-09 Volcker’s tough monetary medicine caused the deepest recession since the Great Depression during the 1981-82 timeframe and that bit of discipline strengthened our financial system to the point where an orgy to end all orgies could be entered into by the Greenspan Fed, and it continued on through the realms of Bernanke and the current promiscuous Fed Chairwoman.

The point I am leading up to is that the bull market pictured in the chart above is as phony as Pinocchio, and if Michael Oliver is right, it will be as difficult to retain its safe haven status as it would be to believe Pinocchio were telling the truth and didn’t need a nose job!

 

Blow-off Status! That’s how Michael characterizes the U.S. T-Bond Market. As stated in his August 10, 2016, missive, Michael noted that we are on the verge of an end to the greatest bull market in U.S. Treasury market history, which will be accompanied as well by the long-dated treasuries of Germany and Japan, the two other countries with sizeable debt markets that back two other reserve currencies—namely, the euro and the yen. As Michael stated, “The T-Bond’s long-term momentum trend is in a blow off condition (the terminal upside vertical phase of an aged bull). Defining when that verticality ends and the opposite begins we’re determining via long-term (annual) and intermediate momentum metrics. A violation of the intermediate momentum uptrend will likely be the first warning of the downturn.

 

Why is this such a big deal? It’s a big deal because when you have a blow off in any market, it is followed by a violent reaction in the opposite direction. In other words, when the long-dated T-Bond finally hits its peak—and Michael’s work suggests we are very, very close to that point in time—the Fed will be no more able to hide its continuous interest rate lies than Pinocchio was able to keep his game of deceit going. His nose gave him away. An interest rate that cannot be suppressed will give the Fed’s lies away.

. . .

So here is what I’m thinking the most likely scenario is. If Oliver is as correct with the T-Bond market as he has been with every other market I have seen him opine on, we will likely see interest rates rise dramatically before year end. If the policymakers can keep a lid on them to get Hillary elected they will do so. But at some point, rates will rise and very early in that process I believe we will see a major economic implosion that could make the 2008-09 version look like a Sunday walk in the park.

With an inability of the Fed to curtail the raise in rates, much as happened in the 1970s but on a scale that far surpasses that of the 1970s, money will be printed and transferred to the public. In fact, policymakers are already planning for this eventuality when they talk about “helicopter money.” Even as inflation rises, more and more money will be printed because the policymakers will not have any other politically palatable way to go. That is when I think we may enter into a hyperinflationary world—the likes of which could very well lead to major geopolitical changes and potentially a hellish situation for Americans.

I pray that God will spare us from this eventuality. But in looking at the political situation and an inability to face truth by our policymakers so that the right policies are entered into, I cannot see any rational way out of a complete breakdown of the global economy and unfortunately the possibility of a World War. In fact even now, it seems the American Empire is planning one with Russia and China///

==

> MORE: http://www.kitco.com/commentaries/2016-08-19/The-Most-Important-Market-in-the-World-Are-We-at-a-Tipping-Point.html

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A CHART to watch now: TLT / Bonds !

 

TLT / Long-Bond etf ... update : All-data / 10-d : LAST: 138.36-0.81 / O: 139.73, H: 140.69, L: 138.22 / Vol: 11.9mn

1-year

TLT_zpst58tf0aa.gif

All-data

TLT-all_zpss4hpladb.gif
:Bondguru2_zpsf8ik1v9o.png: Source

 

A Key Reversal !

 

Here's Why Markets Loved Janet Yellen's Speech at Jackson Hole
Fortune-6 hours ago
That's the takeaway from the Fed Chair speech Friday morning at the Kansas City Fed's annual gathering in Jackson Hole, Wyo. Yellen had ...
Stocks Fall After Yellen's Remarks
Wall Street Journal-2 hours ago

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A Key Reversal !

 

TLT Bonds / 10d

TLT-10d_zpsk5ochsqf.gif

 

Here's Why Markets Loved Janet Yellen's Speech at Jackson Hole (But only briefly)
Fortune-6 hours ago
That's the takeaway from the Fed Chair speech Friday morning at the Kansas City Fed's annual gathering in Jackson Hole, Wyo. ...
Stocks Fall After Yellen's Remarks
Wall Street Journal-2 hours ago

SPY Stocks / 10d

SPY-10d_zpstund32ot.gif

Investors hang on Janet Yellen's Jackson Hole speech
Opinion-The Australian Financial Review-Aug 20, 2016
=====

Notably, markets apparently aren’t concerned about Yellen’s threat to raise rates, as the Dow rallied more than 100 points in the minutes after the speech concluded. Investors appear be confident that Yellen won’t tighten, a likely result of the Fed’s overconfidence since the financial crisis in it’s ability to normalize policy.
(Ah, but that rally did not last long. INDU closed DOWN 53 points, -0.29%)
Markets liked what Yellen had to say
Janet Yellen and Wall Street investors can agree on one thing: The U.S. economy is a relatively good investment.
That’s the takeaway from the Fed Chair speech Friday morning at the Kansas City Fed’s annual gathering in Jackson Hole, Wyo. Yellen had mostly kind words for Uncle Sam, saying that “in light of the continued solid performance of the labor market and our outlook for economic activity and inflation,” the case for raising interest rates again has gotten pretty strong of late.
Notably, markets apparently aren’t concerned about Yellen’s threat to raise rates, as the Dow rallied more than 100 points in the minutes after the speech concluded. Investors appear be confident that Yellen won’t tighten, a likely result of the Fed’s overconfidence since the financial crisis in it’s ability to normalize policy.

Yellen was most bullish on the American labor market, and it’s easy to see why. Wage growth is finally beginning to accelerate, as the U.S. economy has added on average 190,000 new jobs monthly this summer. That’s more than enough to tighten labor markets, and should be good news for consumer spending as well. Investors were also likely comforted by the meat of Yellen’s speech, in which she discussed the changing Fed policy toolkit and reassured market watchers that the central bank has plenty of firepower to fight the next recession, whenever it may arrive.
. . .
U.S. stocks notched their biggest weekly declines since Brexit, after Federal Reserve Chairwoman Janet Yellen said the case for an increase in U.S. short-term interest rates has strengthened in recent months.
The remarks, which were anxiously awaited all week, sparked an initial reaction to sell stocks that quickly reversed itself. Later in the session, stocks again fell, as investors’ expectations for a rate rise later this year climbed. Treasury yields and the dollar also fluctuated before finishing the day higher.
“The statement was no big shock. We would fully expect the Fed chair to say the timing seems more appropriate sooner than later” given current market conditions, said Ryan Larson, head of U.S. equity trading for RBC Global Asset Management, referring to how stock prices remain near record highs, volatility is low and labor markets have been strong.
. . .
Investors are hoping that Janet Yellen, chair of the US Federal Reserve, gives some guidance on the direction of US rates in her speech on Friday.
With the US sharemarket hovering only slightly below record highs, investors are in a state of feverish anxiety as they await Friday's speech by Janet Yellen, the head of the US Federal Reserve. But some analysts warn that this Fed obsession is blinding markets to the major risks that lie ahead.
... Investors are hopeful that Yellen will use her talk to provide some clarity on the future direction of US interest rates, and might even drop some clues as to whether the US central bank might raise rates next month.
. . .
The Federal Reserve's Monetary Policy Toolkit: Past, Present, and Future
TEXT: http://www.bloomberg.com/news/features/2016-08-26/janet-yellen-s-jackson-hole-speech-annotated
The FOMC considered removing accommodation by first reducing our asset holdings (including through asset sales) and raising the federal funds rate only after our balance sheet had contracted substantially. But we decided against this approach because our ability to predict the effects of changes in the balance sheet on the economy is less than that associated with changes in the federal funds rate. Excessive inflationary pressures could arise if assets were sold too slowly. Conversely, financial markets and the economy could potentially be destabilized if assets were sold too aggressively. Indeed, the so-called taper tantrum of 2013 illustrates the difficulty of predicting financial market reactions to announcements about the balance sheet. Given the uncertainty and potential costs associated with large-scale asset sales, the FOMC instead decided to begin removing monetary policy accommodation primarily by adjusting short-term interest rates rather than by actively managing its asset holdings.
. . .
On the monetary policy side, future policymakers might choose to consider some additional tools that have been employed by other central banks, though adding them to our toolkit would require a very careful weighing of costs and benefits and, in some cases, could require legislation. For example, future policymakers may wish to explore the possibility of purchasing a broader range of assets. Beyond that, some observers have suggested raising the FOMC’s 2 percent inflation objective or implementing policy through alternative monetary policy frameworks, such as price-level or nominal GDP targeting. I should stress, however, that the FOMC is not actively considering these additional tools and policy frameworks, although they are important subjects for research.

. . .
Fed Chair Janet Yellen said the case for a hike in the fed funds rate this year has strengthened in recent months. But she stopped short of suggesting a hike could come as soon as September.
“She was a smidgen more hawkish than I anticipated she would be,” says Jennifer Vail, head of fixed income research at U.S. Bank‘s private client group. “That said, I don’t believe she was telegraphing a September hike. I still think it will happen in December.”

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Bonds - is the rally finally ending ?

 

Charts : USD-bonds : TLT :

bonds_zpso75l1uft.pngTLT-3yrs_zps0soazkcl.png

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Next Stage of Huge Bond-Bull Kicking-Off?. (For 02/08/17)

Things are looking up for Treasury Bonds

Bonds tend to run with Gold

 

TLT / Bonds... 6-months : 2-yrs : 3-yrs :

TLT-3yr_zpsoyrfzntu.gif

 

GLD / Gold ... 6-months : 2-yrs : 3-yrs :

GLD-6mos_zpsreltn3vd.gif

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Megaworld (Philippines Condo builder) has the stock chart rolled over (?)

That's what my assessment this chart suggests to me.

A break of Support at 3.00-3.25 would help to confirm this - a rally over 4.00 would help reject it

MEG.ph ... 4-yrs : 6-mos :

MEG-4yrs_zpszw6zsqht.gif

Megaworld group earmarks P60 Bn for expansion in 2017 (Today's Business News, pg. B-3)

+ P 60 Billion this year for: "new residential condominiums, office towers, commercial centers, and hotels"
+ MW says "cash position remains healthy" but they "will also tap debt market through proceeds of P30bn retail bond program"
+ "Fast-tracking" developments : McKinley West, Uptown Bonifacio, Davao Park District, Ilioilo Business Park, Boracay Newcoast, Twin Lakes, and Alabang West
+ The group is set to launch 20 residential projects covering sales value of around P 31.2 billion, with several in Ft Bonifacio
+ Megaworld is also adding seven new office towers in Iliolo, Newport City, Eastwood City, Southwoods City... and six new lifestyles malls
+ We continue to focus on doubling our rental revenues by 2020

I find it odd that the stock is performing so sluggishly in the face of such aggressive expansion. Perhaps there are some concerns within the stock market that MEG is expanding so aggressively when there are real signs of a slowdown in the residental market

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BONDS : Could be a BUY here, near $117

 

TLT ... All : 10-yrs : 5-yr : 2-yr : 6-mo : 10d / last : 117.78 Change:arrow_dn_sm.gif -0.64

TLT-10yr_zpslm8xqmls.gif

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Bonds called : "the short of a lifetime" - on TC's Blog

 

(poster expects TLT rally to 127 or higher)

 

http://tos.mx/H2QDgy?image

 

phil1247 says:

michael eckert of E W trends and charts posted this over a year ago
top call was very close
initial wave 1 ending in may 2017 is near actual low
now we are in the countertrend wave 2 …possibly 50 % retrace
look at the next wave.down
..probably 1.618 wave 1 at least

gary…this is what i was trying to show you

summary….. SHORT of a lifetime boys and girls

scottycj1 says:

Phil
Can you send a better chart ?

phil1247 says:

http://tos.mx/H2QDgy?image

WAVE 2 up to maybe 127 130… 50 % retrace

wave 3 will be the real bond crash …
TLT to 86… then 82

 

And TC on bonds: https://caldaro.wordpress.com/2016/12/17/weekend-update-583/

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Ten Year rates are testing 3.0% - Possible breakout ahead

TNX / 10 year rate x10 ... update

5elVaBd.gif

Interest rates attempting 25-year breakouts!

Interest rates have been falling for nearly three decades. Could the trend of lower rates be over? 

The chart below shows a big test to this trend is in play right now

THESE may shoot higher with Rates... or on their own

GLD / Gold ... update

AFdxImJ.gif

GDXJ / Junior Gold shares ... update

F05A10x.gif

==

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Bonds have fallen to a Key Support Level near TLT-$116

TLT / xx ... update : Last: $116.15 -- / TLT-vs PHM :

z6BzLSH.gif

TLT-vs PHM :

JsqbZi4.gif

==

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BONDS testing bottom of the Long Term Upchannel

TLT / etf for TBonds ... update / TLT: 113.70, TNX:3.20-%

HnEWir9.gif

TLT-etc -vs- Gold & Silver etf ... update -on 530wk support / GLD: $116.01, SLV: $13.74

ibVKEst.gif

Investments shifting out of Bonds... and into Gold : 1.02

K6rKsPJ.png

TYX - 30yr+ Rates ... update : 3.40%

5KCZfAN.gif

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