Wednesday, March 18, 2015

[$TNX.X] update

In the backlink my model anticipated a bounce and then lower lows down to as low as the 50 fib.

Below is actual snapshot from today and it is, so far,  tracking the model pretty well.  Yellen is set to spew her useless drivel at us again today and a move above $21.40 will likely signal that wave 3 of 3 is upon us in interest rates.  It could also happen that she says she will continue to keep them low because of the economy and so they quickly drip to the 50 fib or the level of the prior 4th or the 61.8 fib but then some other new hits and they reverse back upwards.

In the event of the latter, it will be a huge black eye to Yellen and the fed because it will show that the fed can suggest where interests rates should go but that the bond market is much bigger than the fed.  This is what I think is most likely to happen.  Yellen does not want to be known as the fed governor who "got it wrong" by raising rates and therefore "causing" the coming massive recession/depression.  So I suspect she will try to jawbone rates down.  But if she does this and the market turns against her then we are going to be seeing it in print soon that the fed has lost control of the bond market and that means people will have lost faith in the fed. The could send the entire global economy into a tail spin.

Patience will be your ally here.  Let the waves play out and then don't be timid about jumping in and using the coming bottom as your stop.

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