TNX Explosion Incoming
I think I've made my point with my thesis on interest rates, but I will continue to beat this drum until something breaks. Something is going to break soon. The market is fighting the fed ever since they started cutting and the market is calling out Powell's rate cut nonsense. They cut by 100bps, but yields went up 100bps. This is very concerning and we've seen this before, this is going to kill equities when the time comes. Yields are screaming danger right in our faces.
I've seen many bears talk about 5% and I think that is laughable. How about 8%-12% or even higher? I could go on about why I think that fundamentally, but I've already done that. Focusing on the technicals, we see that TNX had a massive breakout in 2020. The downtrend had been forming since the high in 1987, history is repeating itself as it always does. In addition to the nearly 40 year trend breakout, we also have a shorter term bull flag starting from the high in October that just broke. Heading right up into 5% and I believe it will keep on going. Flag pole target is around 8.8%, final target is the 1987 high around 10%. That's the final target for now anyway, I fear it will go much higher.
I've been trying to warn folks about this all year and there's a reason for that, it's not because I hate America, it's because I love America. I'm obviously not a financial advisor, this is for education. However, it's probably not very helpful to just say the market is gonna crash with no plans or ideas to position based on that belief. Shorting is the go to, but very dangerous and somewhat greedy. I think it's at least time to close all positions using margin if you have any, trim winners and take some profit, get exposure to rising yields, get volatility exposure, get some gold, and keep larger cash reserves and savings. Avoid MSTR at all costs.
I've seen many bears talk about 5% and I think that is laughable. How about 8%-12% or even higher? I could go on about why I think that fundamentally, but I've already done that. Focusing on the technicals, we see that TNX had a massive breakout in 2020. The downtrend had been forming since the high in 1987, history is repeating itself as it always does. In addition to the nearly 40 year trend breakout, we also have a shorter term bull flag starting from the high in October that just broke. Heading right up into 5% and I believe it will keep on going. Flag pole target is around 8.8%, final target is the 1987 high around 10%. That's the final target for now anyway, I fear it will go much higher.
I've been trying to warn folks about this all year and there's a reason for that, it's not because I hate America, it's because I love America. I'm obviously not a financial advisor, this is for education. However, it's probably not very helpful to just say the market is gonna crash with no plans or ideas to position based on that belief. Shorting is the go to, but very dangerous and somewhat greedy. I think it's at least time to close all positions using margin if you have any, trim winners and take some profit, get exposure to rising yields, get volatility exposure, get some gold, and keep larger cash reserves and savings. Avoid MSTR at all costs.
Uwaga
Welp looks like the rate cut hopefuls are finally realizing how asinine the rate cuts were. This is going to be a disaster of epic proportions. The people should not accept what Powell and Yellen have done, they are either extremely corrupt or just plain stupid. Maybe both, not sure which is worse. I lean towards corruption because I don't think Powell thought what he was doing was the right thing, not for one second. If he did believe that, it's even more appalling that someone with such little economic literacy was able to become chairmen of the Federal Reserve, what a disgrace.
Powell and Yellen have destroyed America and now they're going to leave office and leave the rest of us to clean up the mess. These people are just straight criminals. We're starting to get very close to the end and there will be many catastrophic disasters and attacks like in NOLA and the arson in California. Some people are talking about how the destruction of homes in California will cause the economy to crash. It certainly doesn't help, but it is not the reason, it is just a catalyst.
Don't let anyone tell you that what is happening right now has anything to do with the crisis we are about to face. It is all predetermined at this point, it does not matter what anyone does from here. It is too late now. My biggest concern is that people will blame the crash on things like the California fire, or maybe they'll say it was Trump tariffs or war. War is coming, but it was always going to come and even if no war, the market will crash either way.
I urge you all to please take measures to protect yourself and prepare for the worst. Buy generators, buy gas and propane, keep clean water, get non-perishable food. We are headed into the worst crisis in American history and a lot of folks are going to get caught with their pants down. Don't let that be you. Godspeed.
You reap what you sow.
Disclaimer:
The ideas I post do not always represent my positions and they are intended for educational purposes. Trading is risky! Most traders lose money.
Disclaimer:
The ideas I post do not always represent my positions and they are intended for educational purposes. Trading is risky! Most traders lose money.
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