Important TNX (interest rate) update...

Here is the backlink to my prior $TNX.X post.  The model there looks correct so far.  In other words, interest rates have begun their 3rd wave up and appear to be about to pull back one small wave before skyrocketing into a 3rd of 3rd which I suspect will gap up.  Below is the updated model.  If the wave goes higher than the blue line, EW will know that the falling wedge was WC and not W3 because if W3 then this would be wave 4 which cannot go into the range of 1 (which is what the blue horizontal line marks).  But EW are few and far in between relative to legacy TA and if they see a higher high, that is when they will react and that would be the orange line.

IFF my count is right here, we should see a gap up soon as 3 of 3 unfolds. 

If this happens, the gap up will generate the moment of recognition for the herd that the fed is not omnipotent like everyone (including investopedia) incorrectly thinks it is; the market leads the way in interest rate moves, not changes to the fed funds rate or any other thing that the fed does.   So all those promises about keeping interest rates down for extended periods going forward will quickly fail and the G23 Pax effect that these false promises have been having on the markets should wear off suddenly as the leveraged longs realize that they have been conned by the fed. 

I think that the fed has in the past leaked this kind of important info in the past but this time, because of the new conservatism that is spreading like wildfire, the fed is actually behaving honestly and not cheating like it normally does. Again, not because it turned honest all of a sudden but rather because they are very afraid of getting caught peddling insider information.  This could land them in jail and that would be a brain death for the academicians.  It would be worse for them than actual death.

Again, IFF I am right about all this wild speculation, it would really piss off the leveraged fund managers who have been counting on those tips in order to get positioned for a turn.  I think they will get blindsided this time.  We will know that is the case if the selling of the markets suddenly and without news begins to get crazy; it should be as if someone didn't get the proverbial memo.

Keep  in mind for the future folks, that it will not be shorts crashing the market.  All the shorts are shut down in disgrace.  It will be the leveraged longs bailing out.  They control these markets.  It is really, really difficult to get the kind of leverage short that you can get long.  For example, the federal reserve is leveraged 75x right now.  Even with deep out of the money puts it is difficult to find that kind of leverage.  But it is common place for longs.  So when people start cursing the evil shorts, just laugh at them for their ignorance about how things really work.

Perhaps this is why the DJIA and S+P continued to higher highs while the small caps and the $COMPX could not.  Perhaps they are more sensitive to interest rates somehow.  I'm not sure about that, just speculating.

The effects on the DJIA should be to drive it lower.  Since gold is fractionally reserved by the market in order to increase their leverage on the long side of stocks (technically being a short sale of gold), unwinding the stock position should cause the gold short seller to cover.  But let's not get ahead of ourselves.  The 3rd wave up is not even confirmed yet.  TNX could still be experiencing some kind of 3 wave corrective move.