On Back Of Soft Demand For Treasury Auction, 10-Year T-Yield Rallies To Upper End Of Symmetrical Triangle

posted in: Credit, Technicals | 0

The 10-year T-yield has rallied to the upper end of a symmetrical triangle. A sustained breakout can have massive repercussions, as this may be a signal that bond vigilantes are finally demanding higher yields in the face of soaring federal … Continued

Unless Bond Bears Get Motivated By Budget Deficit/Federal Debt/Interest Payments, Bulls Could Find Rally In 10-Year Yields Tempting

posted in: Credit, Economy, Technicals | 0

The 10-year T-yield just poked its head out of 4.30s resistance. Economic data in recent weeks have come in much stronger than expected. Although it is hard to argue the rally in rates will have staying power – unless, of … Continued

Doves Fly, Bulls Run, Animal Spirits On Loose

posted in: Credit, Derivatives, Economy, Equities | 0

Even though Chair Powell said it is far too early to declare victory, he and his team did exactly that yesterday when they caught markets by surprise by making a hard dovish turn. The dot plot now expects up to … Continued

Rates, Budget Deficit, Treasury Debt Issuance And Federal Interest Payments – All Rising

posted in: Credit, Economy | 0

Interest rates on both the short and long end have gone up meaningfully. The federal government sits on nearly $33 trillion in debt, and the budget deficit is on the rise even though the economy is growing. This only means … Continued

Higher Rates Not Helpful In Levered Economy, Raising Hopes Of Easing Late Next Year, But Fed’s Hands Are Tied Given Elevated Inflation

posted in: Credit, Economy | 0

The federal government is up to the gills in debt. Interest payments run up in the billions every year. This was not much of an issue in a low-interest-rate environment. But right now, the Federal Reserve is tightening. Higher rates … Continued

Week Could Be Volatile, But Stocks Likely Will Try To Pick Up Where They Left Off Last Week

posted in: Credit, Economy, Equities, Technicals | 0

Ahead of a crucial week in which the FOMC meets and the top six US companies report, large-cap equity indices broke out to new highs last week. The knock on this is that rangebound small-caps are yet to achieve that … Continued

SPY – Medium-Term Risks Building, But Can Rally Near Term

posted in: Credit, Economy, Equities, Technicals | 0

On the weekly chart, SPY remains grossly overbought, but near term there is room to rally – duration and magnitude notwithstanding.  Options can help. US core PCE (personal consumption expenditures) increased 1.96 percent year-over-year in May – essentially two percent.  … Continued

Shortly After Crossing 3%, 10-Year T-Yield Gives out Signs Of Fatigue – TLT Short Put

posted in: Credit, Derivatives, Economy, Technicals | 0

For first time in over four years, the 10-year Treasury rate surpasses three percent, only to raise the possibility that this is as high as it is going to go at least in the short term. After several quarters of … Continued

After Last Week’s Buy-Write, Weekly Covered Call On TLT

posted in: Credit, Economy, Technicals | 0

The U.S. sovereign bond market has hit the headlines a lot these days.  Rates have rallied big since September 2017 lows, but from suppressed levels, and are at crucial stage technically.  At least near term, fundamentals do not allow for … Continued