So how long ago did we begin seriously entertaining higher long-term Treasury yields? Well, per these posts, it was before Halloween that we noted the daily chart breakouts and began assigning macro meaning to the situation. I think the 3 Amigos took to their horses shortly thereafter.
Treasury Yields: Here We Go, Folks (10.25.17)
The Big Macro Play Ahead (10.27.17)
The reason I post this is not to toot my horn but instead, because like many times in the past, by the nature of being contrarian I am going to look stupid now (talking about limits to Treasury yields) for as long as it takes the next macro shift to engage. Just as I looked stupid talking about 2.9% and 3.2%-3.4% long-term yields in October! Duh.
Sure, there will be times when I am just plain wrong, but there are more times when I appear wrong for an extended period before being proven right. It took 4 months after all to register the upside yield targets. Assuming the general limiters hold (with the usual jabbing up and down) it could be months before resolution on this end of the macro as well. It’s just the way the market goes.
But I am not going to quietly go to a corner and wear a dunce cap while looking wrong against the thundering herds of bond bears that were nowhere to be found back in Q4 2017. In this short attention spanned market realm if I don’t put reminders on my own website, sure as shit nobody else is going to.
10yr is at target and can boink up to 3% and the channel line.
30yr is a hair under target and still has headroom, possibly in line with a 10yr tap of the channel line.
Meanwhile, I plan to collect monthly income on SHV, SHY, IEI & IEF while waiting to see if the analysis proves right.
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