The 30 year Treasury yield ‘Continuum’ is postured above 3.4% support and below 4% resistance
The monthly chart of the 30 year Treasury bond yield is stacking candles below the original 4% target zone and above the projected support zone (these acting as reverse targets for the 30 year Treasury bond).
My favored view had been that it’s a new inflationary age, which it sure could be – especially if governments start getting the idea they need to rebuild war torn regions (through fiscal inflationary policies, whereby the Fed inflated in 2020 through monetary inflationary policy) – but then I had pivoted to favor an interim deflation scare before any future inflation.
That is still favored but the lagging inflation stuff lately (e.g. Payrolls, CPI, PPI) have bumped up the inflationary headlines and the yield is going to decide between 4%+ and 3.4% -, with the decision being pretty important, wouldn’t you say?
Scary thought of the day: what if the Continuum has already made its correction in the form of a four month long bull flag?
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Well, if that’s the case, I need to get ready for some pain in all the long term bonds I bought, but at least they won’t be called early! Too many variables. I know you love this stuff, but aarggh.
Actually Mike, I am getting a little annoyed myself. I am out of the way of direct damage because while I have a few very short-term bonds, most of it is just cash paying interest. But as a market manager try to establish the next plan, this is frustrating. There’s a whole lot of difference between inflation and deflation, even on an interim basis. It’s why cash is the logical default position and from there I’ll short, long, and discriminate between sectors and markets speculatively.