The Long Bond is a Little Wedgie

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  • Post category:Bonds

We know that the long bond’s yield has closed a month above the EMA 100 for the first time in decades…

There is a daily chart pattern targeting 3.5% (the thing got to 3.426%) and the big pattern on the chart above targets 4.2%. Wow.

But speaking of the monthly close, what if the true arbiter was not the end of October with its main feature being a holiday that used to be really fun when I was a kid but which seems way over friggin’ commercialized (like everything else) today. Maybe I am just an old crank writing that, getting myself off track from the post’s main theme.

So let’s get back on the theme. What if the salient event has been shifted forward a week to the mid-terms, delaying the chart’s signal because of something fundamental as opposed to technical? The rise in yields began when Trump and his reflationary fiscal policy were elected. Bond yields responded in kind.

Now, the Republicans may carry the day tomorrow but what if just maybe they get thrown out of the House and/or the Senate? What if that blessed state of gridlock looks to be the condition for the next 2 years of Trump’s angry cartoon presidency?

Then could the whole bond thing might possibly prove to have been a giant head fake. The daily long bond is in a falling wedge, after all. Nah, we all know things stay linear and out of the box thinking has routinely been punished in this market. But I do think that November 7th is more important than October 31st.

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