Murmurs From the 10-Year Note

287
Sat, Aug 18, 2012 - 12:43pm

What happened? Just a few weeks ago, we were worried that the treasury market was becoming a "black hole" that would soon suck in all financial assets. Instead, rates have reversed significantly. What does this mean and what does it portend?

First of all, here's where we were back in late July. The 10-year note had just fallen through 1.40% and it had everyone's attention: https://www.tfmetalsreport.com/blog/4046/two-things-my-mind. Here we are, 3-4 weeks later, and were at 1.82%. That is a HUGE move! What the heck happened? I think I have an answer but, first, some background.

Take a look at these two charts. One a is daily 10-year and one is a weekly. Note that the current price of the 10-year is 132.50. This is important because the area around 132 appears to be very important support. You can plainly see horizontal support on the daily chart but, looking at the weekly chart, 132 is also near the trendline from the lows of late spring 2011. Breaking that support and that trend would set a top and would foreshadow a move to 127-128. Now, look at the weekly chart. Notice that 10-year prices have been in a very long term up channel. Then notice that the past three Fed "programs" have been initiated when prices were near the top of the channel.

So, what is going on? Why the sudden dropoff in price? I think I have the answer. I posted this presentation yesterday. You may have already watched it. Watch it again and stop it right at the end, near the 57 second mark.

Fed vs. Private Sector Treasury Holdings

OK, just a couple more things and then I'm taking the rest of the weekend off. First, yesterday's CoT was very interesting, particularly in silver. Before jumping to conclusions, I'm going to wait to see what Uncle Ted thinks of the disaggregated report. In the meantime, here's a C&P of my comments from yesterday afternoon:

Submitted by Turd Ferguson on August 17, 2012 - 2:59pm.
MODERATOR
I had expected gold to be a non-event and it was. For the reporting week, price fell $10 and OI only fell by 67 contracts. The only item of minor note was the 2,478 net drop in The Gold Cartel net short position which brings their net short ratio back under 2 at 1.98:1. Again, this is historically low and very bullish.
The action and the intrigue is in silver. For the reporting week, silver fell 32c but total OI rose by 4700. Obviously, there was a lot of new buying and selling going on. The question was/is: Just whom was on each side? Well...whaddayaknow...it looks like we have a civil war starting in silver.
For the week, The Silver Cartel total long position grew by 3,202 contracts. This is likely the silver "raptors", as Uncle Ted likes to call them. However, The Silver Cartel total short position also grew by 4,752 contracts. This is likely JPM but I'll wait to see who Ted fingers in his report tomorrow.
I've never seen a Silver Cartel long position this high before. Never. Maybe it has been but I sure as heck don't remember when. For perspective, on 2/28/12 it was 33,802 and on 4/20/11 it was 34,043. Nearly identical levels before sharp beatdowns. On 12/27/11, just before a 2-month, 20% UP move, the total long position was 41,224. Now it's 47, 797!
Similarly, the total short position is unusually large. The last time it was this high was on 3/6/12, just after the peak and subsequent beatdown of late February. In the recent past, it has been as high as 89,827 on 4/6/11 and as low as 55,356 back on 12/27/11.
At first glance, we appear to have the makings of a civil war. Instead of acting collusively, the smaller banks seem to be buying and thus attacking the short position of JPM. To contain price, JPM is being forced to issue new paper independently. Again, this is how it appears. Let's wait until Uncle Ted dissects the report before jumping to any more conclusions.
Perhaps the smaller sharks smell blood in the water. Maybe they sense the opportunity to trap JPM on the short side and squeeze the daylights out of them. Could these banks be expecting an historic, hot and explosive move in the weeks ahead???

And then there's this. While researching this post, I came across this video from March 19th. I don't know who this Ilcyzsyzn guy is but, right now, he looks like Nostra-freaking-damus! Hopefully, he's made himself enough money over the past six months that he can buy himself a couple of vowels.

https://finance.yahoo.com/blogs/breakout/wait-gold-bottom-1525-ilczyszyn-202824187.html

I hope everyone has a great weekend. Relax and prepare mentally for everything that is soon to come.

TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  287 Comments

phanophite
Aug 18, 2012 - 12:45pm

first

first

thurd aye
Aug 18, 2012 - 12:58pm

silver >?>>

oh dear I seem to have wet myself to get a medal.Sorry folks.

I like silver better than gold anyway just at the moment. ;O))

Dagney Taggart
Aug 18, 2012 - 1:00pm

So when do....

the rates go negative ala. Switzerland?

¤
Aug 18, 2012 - 1:07pm

Not sure what forum to go to?

Thanks for the update TF.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Not sure what forum to go to?

Submitted by DrkPurpleHaze on August 18, 2012 - 10:56am.

Consider going here and keep the debate and idea's flowing. Its one click away.

https://www.tfmetalsreport.com/forum/4100/white-room-wblack-curtains-wat...

As some of you know I started that forum the other day to address something entirely different. I've moved on from that and I believe the site has as well. My original intention was to use that thread as a topical clearinghouse for posts or topics on this main page to be able to go to if anyone was unsure what forum or thread to take it to. (There are almost too many threads to find the 'right' one quickly enough).

I'm headed over to that thread soon to start posting whatever it is I want to that doesn't seem topical to any of the threads I have going in the Frivolity Forum or elsewhere on here. I would ask anyone to consider going there with anything that seems like a 'hot button' and just continue it over there. It's one click away and can serve as a quick outlet to resume the passionate debate no matter what the subject is. Everything under the sun is fair game.

It might be easier to go there sometimes then a Mod or TF coming on and saying "Please move it to the forums". I have more to say about that thread over there. Please ignore the first post because it's no longer relevant and I'm looking to get that first page over with and onto page 2 to keep that thread on track to what I think it could become.

A place to discuss anything from here that you aren't sure where to bring it. Consider it a hallway off the main thread that you can step aside and into. It's what the site wants anyway as far as 'hot button or off topic comments. Remember, anything goes. Any subject whatsoever.

Hope to see you in... A White Room w/Black Curtains @ The Watchtower

https://www.tfmetalsreport.com/forum/4100/white-room-wblack-curtains-wat...

TheGoodDoctor
Aug 18, 2012 - 1:10pm

Hey how has everyone been?

Hey how has everyone been? Been reading the boards but not posting much.

I still think there will be a beat down in the metals before the election and QEIII. With the talk of releasing more oil from the strategic reserves as well, they will try to get commodities to take a dive again only for the short term until the election. Got to make things look good for the election you know!

boatman
Aug 18, 2012 - 1:17pm

iran isreal

the escalating syria fighting makes an isreali strike more possible due to hezbola losing support from assad and hez not wanting to shake up their support in lebanon.

hez has enough rockets to melt isreal .........that is their main concern of retribuition.

not even obozo would be able to decry a strike around convention time.

65-70% chance of a strike before election.

SV
Aug 18, 2012 - 1:20pm

Free Silver Mercury Dime

Sign up at the forums of the Silver Liberation Army and bring down the banking-industrial-military-corporate complex and win a Free Mercury Dime!

https://silverliberationarmy.com

¤
Aug 18, 2012 - 1:21pm

Historical UST Price Charts

Historical Perspective

From January 2010 to Present

From January 1912 to August 2012

Admiral Ag Bar
Aug 18, 2012 - 1:22pm

Thanks Turd!

Great post! I patiently await the demise of JPM!

maravich44
Aug 18, 2012 - 1:25pm

JPM trouble ahead,trouble behind

I think that Jamie is in it way deep, and will be sacrificed, he is too arrogant to see this coming, he is a low level player in the grand scheme. https://www.youtube.com/watch?v=BEDkNAuNCsQ

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Subscribe or login to read all comments.

Contribute

Donate Shop

Get Your Subscriber Benefits

Private iTunes feed for all TF Metals Report podcasts, and access to Vault member forum discussions!

Key Economic Events Week of 11/11

11/12 Three Fed Goon speeches
11/13 8:30 ET CPI
11/13 11:00 ET CGP on Capitol Hill
11/14 8:30 ET PPI
11/14 Four Fed Goon speeches
11/14 10:00 ET CGP on Capitol Hill
11/15 8:30 ET Retail Sales
11/15 8:30 ET Empire State Manu Index
11/15 9:15 ET Cap Ute and Ind Prod
11/15 10:00 ET Business Inventories

Key Economic Events Week of 11/4

11/4 10:00 ET Factory Orders
11/5 9:45 ET Markit Services PMI
11/5 10:00 ET ISM Services PMI
11/6 8:30 ET Productivity & Labor Costs
11/6 Speeches by Goons Williams, Harker and Evans
11/8 10:00 ET Consumer Sentiment
11/8 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/28

10/30 8:30 ET Q3 GDP first guess
10/30 2:00 ET FOMC fedlines
10/30 2:30 ET CGP presser
10/31 8:30 ET Personal Income & Spending
10/31 8:30 ET Core Inflation
10/31 9:45 ET Chicago PMI
11/1 8:30 ET BLSBS
11/1 9:45 ET Markit Manu PMI
1/1 10:00 ET ISM Manu PMI

Key Economic Events Week of 10/21

10/22 10:00 ET Existing home sales
10/24 8:30 ET Durable Goods
10/24 9:45 ET Markit flash PMIs
10/24 10:00 ET New home sales
10/25 10:00 ET Consumer Sentiment

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Forum Discussion

by silver66, 32 min 59 sec ago
by Green Lantern, 2 hours 18 min ago
by NW VIEW, 2 hours 26 min ago
by argentus maximus, 2 hours 45 min ago