It’s almost as if bond market wise guys knew…

10 and 30 year Treasury yields break consolidation

We had an NFTRH update yesterday discussing the implications of a consolidation breakout in long-term Treasury bond yields, as was hinted at yesterday morning. Those implications are both for near-term positioning and a bigger picture macro view, all of which is being furthered today.

Now the little hint has become something that everybody now knows, after the payrolls report. We’ll leave real strategic analysis for that update, for the Trade Log (moves made yesterday and today) and generally for NFTRH going forward. But here I do want to note that it looks pretty fishy that on a day (yesterday, as the markets used the puke by a lousy company called Facebook to take a hard pullback) when the markets were correcting and preliminary employment data like JOLTS were apparently forecasting flat at best employment, the yield made the hint.

Today, fresh off the blowout payrolls report the hint becomes a breakout from consolidation. Who, I ask you, were the wise guys who suddenly and impulsively just had to sell Treasury bonds yesterday morning, driving the yield up before it pulled back in-day? It just seems fishy. But today we know why the selling happened. It’s just that nobody is supposed to be privy to economic data like payrolls, eh? Yes, we’re on a level playing field folks (he mutters sarcastically).

I am glad to have gone over the implications of a yield breakout, but when it recoiled in-day yesterday I wondered if it was just an anomaly or said wise guys peering into their crystal ball a day early. Answer: B, wise guys. Crystal ball being inside info (all in my jaded opinion of course). Ha ha.

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