Earlier today, I made plans to write up a post this afternoon regarding the edge-straddling status of the 10-year note and the Long Bond. Before I could type it up, both reversed and rallied over a point. Whoops.
As reference material, I ask that you go back and review this post before we continue: https://www.tfmetalsreport.com/blog/4112/murmurs-10-year-note.
Now take a look at the charts below. They are hourly charts and notice that, as of 4 short hours ago, both charts were on the verge of breaking lower. What happened? I must admit that, at the time, I thought that this was simply a silly collection of quotes. Reviewing them again with the benefit of hindsight I can see that Fed Goon Lockhart was able to accomplish his primary mission. From ZH: https://www.zerohedge.com/news/feds-lockhart-kills-hopes-further-qeasing
*LOCKHART SAYS `MONETARY POLICY IS NOT A PANACEA'
*LOCKHART SAYS ECONOMIC DATA HAVE BEEN `FIRM' IN LAST MONTH
*LOCKHART SAYS HOUSING IS STABILIZING AND `ENCOURAGING'
*LOCKHART: MONTHLY UNEMPLOYMENT RISE SHOULDN'T BE EXAGGERATED
*LOCKHART SEES `MORE APPETITE FOR RISK'
*LOCKHART SAYS DISINFLATION, DEFLATION NOT NOW A CONCERN
If they (The Fed and its goons) can talk the bond back up, they can forestall the need for QE a while longer.
Note that, by no means, is any of this permanent. Today's action simply mirrors yesterday where a steep drop to support was met with a quick, snap-back rally. Both the bond and the note remain in the tight, little range where they've resided for the past week. What will happen next and which direction will the range break? I have a feeling that tomorrow's FOMC minutes will go a long ways toward providing resolution.
Here are two silver charts that I tucked into the previous post. The first is a weekly chart that I used to finally declare victory in Battle Royale I. Frankly, the bogey for BR1 is now so low that victory became inevitable. Unlike the false hope of 2/28/12 where price immediately fell back below the line, this final victory march began last week near $27.50 and has tagged $2 onto price. BR1 is now over and we have won. Any pullback, if one develops, will use the BR1 line as support, not resistance. Our focus now shifts to BR2, currently near $30.50. It is this line, together with the 200-day MA, that will be the next major battle.
And one more thing you need to take note of...the grains. Both the NovBeans and the DecCorn made new contract highs today as continued heat and drought wreak havoc on the current crops. Since both are at all-time highs it's impossible to say where the next resistance might develop. The DAG, though, sure looks like $16+ is in the cards pretty soon.
That's all for today. Not surprisingly, the metals both came under pressure on the Globex as The Forces of Darkness re-apllied some shorts, post-CoT survey, in order to tamp down price. Well, let 'em. Who cares, anyway? They're about to get blindsided and run over like Randall Cunningham.
See you tomorrow.
p.s. Freaking TTM is finally taking new subscriptions again. If you'd like to come over and join in the fun, just click the link below. Now is a good time to join, by the way, as tomorrow is Heat Miser Wednesday!