What do I mean? Well, of course, it must have something to do with Elliott waves else what good would the prediction be?
And so it does.
In the backlink to the prior update on the TNX (10 year treasury x10) chart, I provided the model below.
Here is the actual. Whereas the model expected a 5th wave (5 of 1 of 3) to peak in the $22.60 range, actual peak was 23.04. I was off by, um, exactly 44 cents... Shit. In any case, since the peak we got what looks like 3 waves back to the level of the prior 4th.
Below is where we are in the big picture. Now that Yellen has saved us from a increase in the essentially meaningless fed funds rate, I model that that real rate that the economy cares about (i.e. the 10 year treasury rate) is about to move up rapidly as shown below.
I'll repeat my firm position: the fed doesn't control real interest rates or anything else in the economy. It distorts the flow temporarily like a boulder sitting in the middle of a mighty river but it does not change the course of the river. The office of the federal reserve is running a con game, period. They can control the weak minded but when liberalism is chased away from the herd by hard times that just won't quit, pretty soon the "stupid" people begin acting a lot more intelligently than the con men ever thought possible.
The herd is far larger and far more economically important than the money changers are and so when the herd decides rates will go up, which is what the chart model is predicting will most likely happen, rates will go up. SELLERS of treasuries do not set the interest rates. BUYERS do. So simple, yet so few get it.
Janet Yellen just needs to call her friends at the Japanese Central Bank and ask them how they've managed to coax the markets into demanding less than 200 basis points (and most times much, much less) on 10 year bonds for the past..... 18 years. =)
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