Many observers have pointed out that the US Treasury should have lengthened the maturity of its debt by selling much more long term debt when yields were low.
There’s a fallacy inherent in that thinking. Yields were low partly because the Fed was absorbing or funding most of the debt. If the Treasury had massively increased issuance at the long end back in 2020, then yields would not have remained low. The additional supply could not have been absorbed at low yields/high prices. The additional supply would have forced prices down and yields up.
In short, the US Government issues so much debt, if it tries to issue it at the long end, it will force yields higher, whether now, in the past, or in the future.
So forget about the shoulda, coulda. It couldna.
Now, back to our usual look at the intraday. The hourly chart of the ES, 24 hour S&P futures shows the market challenging the downtrend line from the September 14 peak. This is the second direct attack on that line. As the saying goes, the third time is the charm. Not the second. So we should expect one more pullback… at least… before this trend is broken. Big pullback or little pullback, I don’t know, but rulez is rulez.
On the other hand, there’s still a 5 day cycle projection of 4300, so maybe this time is differnt. On the Lookout for Big Low
Over in Gary, US bonds may have reached a brief equilibrium point. The 10 year yield projected to 4.90 on a couple of cycle time frames. So it’s time for a breather there. Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning. Tepid Tax Collections Mean It’s the Supply
When it comes to gold, welcome to the gates hell. But it has hit downtrend support and there are signs that a short term low is at hand. But if not… Gold Breaks Down, With Long Term Implications
For moron the markets, see:
- Tepid Tax Collections Mean It’s the Supply October 4, 2023
- Screen Picks – Definition of Insanity Exemplified October 2, 2023
- On the Lookout for Big Low October 1, 2023
- Gold Breaks Down, With Long Term Implications October 5, 2023
- The Rhymes of History September 24, 2023
- Here’s Why This Is a No Clickbait Market for Primary Dealers August 24, 2023
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