And the plan is for a bond yield pullback from hysterical highs
With respect to the long end of the Treasury curve, both the 30yr (top) and 10yr Treasury bond yields are below their daily SMA 50. Since inflation and the yields that indicated it have been public enemies 1 and 2, a continued pullback is probably needed for the Q4-Q1 seasonal party to have some endurance.
The monthly ‘Continuum’ view of the 30 year Treasury bond yield is still in potential reversal mode, pulling back from 4.4% to 3.8%. We will manage downside potentials into H1, 2023 if this proceeds as expected.
I marvel at this chart because the hysterical spike of 2022 could well be a sentinel scouting out the future and a different macro backdrop than anything we’ve seen over the last few decades. But for now the plan is for a pullback to the potential benefit of the Q4-Q1 seasonal relief plays, getting a new bounce in their step and holding today. *
* This includes the energy sector, on which I failed to take a significant profit on a short position yesterday and today took a partial small one. On balance though, things are going fine in the relief trades with gold and silver stocks out front. At some point, however, gold stocks will have to differentiate from the general relief in the inflated stuff. But it’s a bit of a silly seasonal now, so it could take into H1, 2023 for that to shake out.
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