Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Stock Market Calm Before The Storm - 20th Oct 17
GOLD Price Creates Bullish Higher Low - 20th Oct 17
Here’s the US’s Biggest Vulnerability in NAFTA Negotiations - 20th Oct 17
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
Q4 Pivot View for Stocks and Gold - 14th Oct 17
Gold Mining Stocks Q3’17 Preview - 14th Oct 17
U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold - 14th Oct 17
Yuan and Gold - 14th Oct 17
Tips for Avoiding a Debt Meltdown - 14th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Watch As All the Bond Market Rats Jump Ship before FOMC Meeting

Interest-Rates / US Bonds Mar 13, 2015 - 10:38 AM GMT

By: EconMatters

Interest-Rates

Short-Term Market Flipping

Markets are just hilarious these days, there is no meaningful investments in the era of High Frequency Trading, Spoofing Algos, Pump & Dump IPO Schemes and ZIRP free money to borrow at the drop of a hat.


Patterns, Patterns & Recurring Patterns

Again after an excellent employment report where bonds are crushed, how many times has that happened in the last year? You would think that after a while bond bulls would just get out of the way before the damn report, but based upon the price action after the reports, there are a lot of slow learners in the bond market.


Read More >> Six Days Until Bond Market Crash Begins

Bonds & Stocks are essentially the same trade these days

And just like the selloff after robust employment numbers, the following week the bulls buy the dip, just like the equity bulls buy the dip after selloffs. It is really one in the same trade in the era of ZIRP as both are long oriented markets. Likewise, Bond Shorts are slow learners because this pattern keeps happening over and over, and the shorts keep getting squeezed like today based upon the price action. What were you looking for a strong retail sales report?

Retail Sales is a flawed, archaic report which made sense 20 years ago

We haven`t had a strong retail sales report since the internet was invented, it is an archaic report, consumers don`t shop that way anymore, and the data set is flawed. You should never expect a strong retail sales report when even the US Post Office now delivers internet-ordered packages on Sundays! If you happen to get a better than average Retail Sales Report that is just gravy, but traders should never position themselves positively in front of this report, it has missed like 80% of the time.

The Sky Really is Blue, and not Green

Unfortunately for the Bond Bulls, there is an all-important FOMC Meeting next week which could just change the entire market paradigm prism that they have built Zen like obsession with anything yield related. As we speak, there are only four days until Janet Yellen explains herself at an FOMC Press Conference which is never good for Bond Bulls.


Read More >> The Real Reason the Fed Has To Raise Rates in June

 

Bond Auctions are Dog & Pony Shows

Yes, there was a weak 30-Year Bond Auction, but that was no accident. These bond auctions are a complete farce, they are as rigged as the day is long. Maybe in the old days these bond auctions meant something but today they have become a complete joke, a trading event at best. The outcome is whatever the big money in the markets wants them to be! The outcome is decided well in advance by the big players. There is no price discovery process going on with these auctions. You are either on the inside or the outside reacting to the insider`s game. That 30 year bond auction outcome was as good as decided on Monday afternoon.


Rally Faded Fast

Hence if you want to know the reason that retail sales report was faded so much, or the 30 year bond auction was so bad, all you have to do is look to the economic calendar for next week for your answer. There is a damn FOMC Meeting next week, and not just any FOMC Meeting, but the one where the Fed gives its quarterly outlook, Fed forecasts, and Janet Yellen gets asked a bunch of difficult questions by economists regarding FOMC Policy.

Read More >> Rate Hikes Already Priced into the US Dollar Index

Janet Yellen Speaks

This is not the environment for buying and holding on a boatload of recently profitable bonds in this flipping market world that we reside in, considering Janet Yellen now has to explain why the Fed Funds Rate is still sitting at zero percent with another 250k plus employment report in the background instead of a minus 250k employment report, which is what brought on the drop to zero percent interest rates 7 years ago.


The Fed Has No More Patience

It takes just one word change, a slip of the tongue, two Fed member descents, not to mention an outright signal to the markets that June is indeed the date for the first rate hike, and bond markets are getting crushed like a 20-year old Ford Bronco at the salvage yard. This is the real reason bonds started selling off after the early morning ramp up, and the reason any spike-up will be heavily sold into going into Wednesday`s FOMC Meeting, Forecasts and Press Conference.

Read More >> The Fed Waited Too Long: Here Comes Inflation

Liquidity is Never There when you Need It

Next week is all about the Fed, and the positioning or should I say De-Positioning will be taking place right up until the last minute of this all-important Fed Meeting. In short, would you want to be holding onto your profitable bonds when there is a 50% chance Janet Yellen drops the bomb and signals a June Rate Hike? Remember there is plenty of liquidity before the announcement, but not an ounce of it for longs after the announcement if she drops the hammer. This is why the Bond Bulls will be scurrying from the grain storage bins before next Wednesday’s Quarterly FOMC Meeting, they can hear the farmer coming up the path.

By EconMatters

http://www.econmatters.com/

The theory of quantum mechanics and Einstein’s theory of relativity (E=mc2) have taught us that matter (yin) and energy (yang) are inter-related and interdependent. This interconnectness of all things is the essense of the concept “yin-yang”, and Einstein’s fundamental equation: matter equals energy. The same theories may be applied to equities and commodity markets.

All things within the markets and macro-economy undergo constant change and transformation, and everything is interconnected. That’s why here at Economic Forecasts & Opinions, we focus on identifying the fundamental theories of cause and effect in the markets to help you achieve a great continuum of portfolio yin-yang equilibrium.

That's why, with a team of analysts, we at EconMatters focus on identifying the fundamental theories of cause and effect in the financial markets that matters to your portfolio.

© 2014 Copyright EconMatters - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

EconMatters Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife