My client letter Aug 18th:
A higher USD would likely time with a needed Tech pause, or pullback, depending on the rate of change. One key theme I have had for weeks is a Rate Spike. It is playing out but the 10-yr yield chart needs to pullback gently and shallow to maintain my 1% price target by mid-September.
YES! The pullback in TNX was gentle to the 21D and then bounced – opening up today gap up at .66%
Powell’s speech basically cemented the macro support – why hold treasuries if they yield 0% for the next 5 years or forseable future?
Then today in DM:
And here’s why bond desks are likely selling beyond Powell’s very-good reasons to sell (new inflation mandate and forward guidance) – PRECEDENCE:
My call for rate spike, short TLT is working…
AND my note to clients: …“line in the sand” for yields has moved Reflation trade: 10YR YIELD 0.666%…..is also working.
AND why I still think SHORT gold, silver, miners short still makes sense…
Plus my intermarket analysis – talked about daily but reviewed here on StockchartsTV
So to confirm my August market timing call for rotation from Momentum to Anti-Momentum plays – like banks – they need follow through to be a key theme for Q4, but they are definitely forming very nice set-ups for continuation.
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