Did Yellen raise the rates without telling anyone???

Prechter teaches (and proves by way of historical data) that the market sets the long term interest rates, not the fed.  The fed is a fast follower to what the bond market is doing and the fed does this in order to fool people into believing that the fed is in charge of anything but running a confidence game.  So it can look for some time that the fed is running the show but, as boldly predicted in these pages, the fed appears to be losing control of the bond markets.

Here is the backlink.  As you can see, the EW model prediction was for wave 3 of 3 to begin taking off.  And, as you all know by now, 3 of 3 generally moves very quickly and that oftentimes means the inclusion of unfilled gaps.




Here is the current snapshot and it really looks similar to the model so far if I do say so myself.  Maybe it will come back down and fill that gap now but if this model is correct it will "vee" bottom as shown and then turn sharply back up.  It's also possible that this will turn into a rising wedge but that is currently not my top model.

I'll often talk about the true fundamentals of market moves being unknown and unknowable but that is a general rule.  I do think there are some times when the fundamental behind a move are pretty obvious and I can tell you that with record margin debt in use, the inability of the fed to talk everyone into keeping rates down (AKA controlling the bond market) has got to be making the leveraged longs as nervous as all get out.

I would not stray too far from UVXY right now.  IF these rates keep going up, the dam of confidence is going to break and the market participants are all going to crowd for the door at the same time.