ZN1! trade ideas
ZN - 10Year NoteWith extensive YCC - Price continues to move lower, creating an
even larger Divergence between Price and Yield.
Not at all constructive for Buyers.
Bonds are going to continue to grind up the Bigger Lies.
ROCs spooked the FED, so they are busy tamping down the
Fears.
Issue is, the Fear is all about Trust.
That has clearly broken.
10Yr - A Very Clear Capital Return PanicSince January there has been a stealth accumulation out the Curve.
In March it began to quietly accelerate.
While Algo's drove ZN into the 131s, buyers were gobbling up
each and every drive lower, building an outsized position which
saw Volume peak in May from May 2nd to May 31st.
Dark Pools began their acceleration in March.
There is a clear trend deeply concerned with an "Event" - one
which saw Volumes begin to accelerate June 16th.
Volatility in Bonds should begin to pick up dramatically.
Extreme Caution is warranted for Equity Complex, in particular
Technology and Regional Banking.
The VIX Curve, specifically SEP/OCT spread should be closely watched.
We are seeing clear signs of Backwardation that could quickly invert.
10 Year Treasury Note into Jackson Hole10yr Yields peaked at ~1.70 as the Federal Reserve began YCC
(Yield Curve Control) well in advance of recognition by the
Retail Bond Market.
With a shortage of T-Bills and Janet Yellen attempting to Fund
the Fiscal Malfeasance out the Curve in order to reduce Short
Term funding.
With CASH mounting in Money Market Funds, there remains a
large pool of Cash with the potential to absorb further issuance
while driving Notes to Bonds Yields even lower.
The issue becomes the non-transitory nature of shortages,
rates of labor, price levels for those of us keeping track and
a number of perversions to the integrity of Data presented.
There is a long history of Intervention Failures, the approaching
one will be historic. Europe has by any measure, already defaulted.
This Point of recognition is quickly approaching in August.
It will spread and generate a panic.