[$TNX.X] update

In the backlink there were two models presented and I was endorsing the one with shorter term bearish moves.  The herd decided to power up into the original model instead.  Because of this breakout we are clearly into the heart of wave 3 up.


I think that it was this "unexpected" (at least by those who do not understand the EW principle) move up in rates is what is spooking the DJIA.  Today's selloff occurred as rates gapped up.  These are real interest rates, not the largely symbolic fed funds rate that the fed controls.  These rates affect margin debt.  These rates affect market leverage.

As I clearly stated before, Janet Dearest will have to raise rates in an unexpected way lest it become obvious to all that the fed doesn't really control interest rates.  The market does.  This is not a guess because Prechter already clearly showed the data to support this view a long time ago.  If the market says "we are not loaning you any more money for free" then it's over.


Buy the interest rate dip folks.  The fed is un-doing all of the things that gave it magickal (please look up the word magick if after all this time of me using it you still believe it is spelling error...) influence of the herd.  The elimination of QE, the talk about income inequality when you know damned well she cares nothing about the poor, her approval of the reining in of big wall st banks as evidenced by her team assuming direct control for their oversight, etc. 

Yellen is going to attempt a careful wind-down of a Ponzi scheme.  She thinks she can engineer a soft landing.  Because of the impossibility of this task I will leave you with an image of the chair woman of the fed which Mish posted long ago as a clear measure of disrespect and disdain for her.  I share his sentiments on this matter.