83 thoughts on “CHART OF THE DAY – 10 Year Note”

  1. Don

    Gary, why are you so suddenly interested in the bond market, a market you once said that you don’t follow? Do you think there is money on the short side? Sure we may get a small bounce or it could the bonds could go on to recover for months but isn’t it a little late to be looking at being on the short side?

    2. Gary Post author

      Because I think there are signs the bond bubble may finally be popping.

      Ultimately I think this will be very good for gold and probably long term very bad for just about everything else… unless this is the one bubble in history that deflates gracefully.

        1. vin

          No Gary. No Gary. If bonds collapse, gold is in serious trouble, that is, in dollar terms. They WILL not allow this to happen. They still have some ammunition left. Or, at least let us hope and pray that they do. Otherwise there is a VERY HIGH probability that things will get very ugly.

          1. GMoney

            I disagree. If bonds collapse it would wreak havoc in many parts of the economy and cause great instability and uncertainty. This is good for Gold. Always has been.

          2. vin

            GMoney. It will be very deflationary. In deflationary times the worth of gold increases in terms of all assets but decreases in terms of the currency i.e. dollars in the present case.

          3. Pedestrian

            Agree Vin. One thing we should be able to count on with gold is that at the very worst an ounce of it will still buy a good men’s suit no matter which way the wind blows, I happen to strongly believe we have a very serious deflation ahead of us still. My proprietary indicator suggests gold could fall all the way back to its 2001 lows. I am dead serious. I just don’t know what that means has happened in the world except that the debt bubble has popped and cash does indeed become King in all its forms be that dollars or gold. So while the price per ounce is above 1130 today its buying power will be preserved even at a third that price level. No gold bug wants to hear that of course. The idea that gold could fall to the middle hundreds and still carry its purchasing power is not what most signed on for. Because what they really want is more dollars when the trade is over.

  2. dboz

    I like the bond info as it could be a precursor to larger market disturbances brewing. A little SM volatility would do me some good.

  3. Gary Post author

    It’s starting to look like the dollar formed a top right after the rate hike, just like it did last year.

  4. Steffmeister

    Every skilled analyst knows that you need to look at the bond market in order to know the stockmarket and the gold market aswell. Hey I am not a skilled analyst just a guessing amatuer, but I think I know that the bondmarket is topping first (July 7th) and then the stockmarket is about to top, yes do you sense a topping pattern i stocks right now? Finally it’s golds turn to shine 🙂

  5. Steffmeister

    The dollar is really strong at the moment what could possibly break it? I think the dollar needs to break before a breakout in gold …

  6. ras

    Cycle analysis is at best a tertiary tool. It needs to be combined with other tools for effective results.

    1. Pedestrian

      I combine it with chicken bones and guessing. I try to eat the chicken first since I usually get better results that way. Otherwise I just chuck dice against the wall or flip coins. Sometimes it works!

    2. jeffd5584

      The bigger problem is that “cycle analysis” differs tremendously from one technician to another. There are multiple cycle’s at work at all times, so it’s very easy to ignore the influence of one cycle in favor of one’s position bias. To this date, I still have no idea what cycle’s Gary references when he talks about them. The only time I’ve seen him mention an actual time cycle was his reference to an aborted (price wise) cycle low from Feb 2016 (in the time window of the 2002/2009 major cycle low’s).

  7. vin

    Gary, That is why it won’t be allowed to happen. btw if it does happen, then gold is roasted in dollar terms.

  8. Pedestrian

    Anyone ever heard of the lumber / bond-rates correlation? This is one that I had all but forgotten about since it so rarely ever comes up. But Tom McClellan has an article on it today. It might be one of his discoveries. Not sure. Anyway, he says when lumber futures are rising so are rates and his chart suggests the speed of increases could accelerate and thus bond prices are indeed set to fall further.
    https://www.mcoscillator.com/learning_center/weekly_chart/lumbers_message_for_interest_rates/

    1. jeffd5584

      the low VIX says the same thing it said in late August/early Sept 2016…i.e. the herd loves to sell volatility. The ultimate “hedge fund hotel” of chasing the yen carry and squeezing nickel’s out of the options premiums. Pavlov’s market.

      Stock market most likely peaked out at 2280 SPX/1390 RUT and now it’s a whole bunch of expiring calls above and a lot of bagholders set up.

  10. dboz

    It says, buy the market, there is no risk so no reason to hedge.

    So if I am understanding this correctly, the world now loves printed dollars over all else. It is THE safe haven throughout the world. Oh, and BITCOIN when you can’t get dollars. Gold and silver are nothing more than trinkets for jewelry and little else any longer, maybe some solar panels and electronics in the case of silver.

  11. Steffmeister

    This is VERY important to understand, this is THE CORE:

    From “the bird whisperer’s” thread, my post several weeks ago:

    This thread is almost 4years old:

    “Now I expect that interest rates will go negative before TPTB throw the towel into the PM ring. But that time is relatively close. It seems clear that the beginning of the next PM bull will be simultaneous with a rise in interest rates. Now if the Japanese screw with the JGB, (Kyle Bass post xmas interview) and manage to torpedo world bond markets, this will set a few big dominoes crashing against each other, and when it comes home to the dollar bonds they will start falling. But it doesn’t have to be the Japanese that set it off. I do think however that bond yields are the key to the lock of our PM treasure box”

    Negative rate first=yes
    Rise in interest rates=yes
    Bond yield rising=yes
    Rising Gold&Silver prices=no

    Three thumbs up and we are waiting for the fourth!

      2. jeffd5584

        Exactly Surf City. Someone who actually talks about cycles on a site that is supposed to use cycles. I’ve mentioned it a bunch of times, but the 94 TD cycle has been running the markets for 2016. Channel line resistance at 2280 SPX and some bigger cycle confluences hit last week. It could still hang out at these highs until mid-January (which would follow the pattern from April and early Sept).

  13. Steffmeister

    Hmmmm … fiddling with JGB sounds familiar from 4years back, are we getting closer …

    Bank of Japan raises growth outlook:

    The Bank of Japan kept monetary policy on hold and turned optimistic on the growth outlook as a slide in the yen sharply improves the outlook for Japan in 2017.
    Japan’s economy is “likely to turn to a moderate expansion” with rising domestic demand, large-scale fiscal stimulus and growing exports, the central bank said…
    Japan Slashes 2017 Bond Issuance By 5% In Implicit Boost To QE; First Reduction In 10Y JGBs Since 1998
    Japan’s ministry of finance announced on Thursday that for the first time since 1998 it would slash government bond issuance in fiscal 2017 which starts on April 1. The MOF plans to issue Y154.0 trillion in JGBs in coming fiscal year, down 5% from an initial Y162.2 trillion for the current fiscal year, as a result of sliding demand for debt amid continued very low to negative interest rates.
    The JGB plans also feature a rare year-on-year cut in the issuance of 10-year JGBs: such a reduction is the first since fiscal 1998.

    2017 looks more and more interesting by the minute !

    1. Surf City

      Michelle, I called for the SPX to find an IC Low in Jan/Feb 2016, Late June 2016 and Nov 2016.

      I also saw the Gold Intermediate Cycle topping by mid-August 2016 and have been hedged against my remaining longs ever since (mostly DGLD but also trades with DUST and ZSL)

      Feel free to review my posts here:

      https://surfcity.co

    2. Surf City

      I am still looking for a Yearly Cycle Low (YCL) in Gold here in December. Take a look at a 3 year chart and you will see that Gold’s YCLs have been in Nov/Dec for the past 3 years. So if/when a YCL forms, we should see at least one “right translated” short term Daily or Trading Cycle that makes a higher TC Low or DCL.

      After that, Gold’s longer Intermediate Cycle could still roll over and make a lower low similar to the long Bear. Much depends on the USD here, IMO. Short term, it looks to me that the USD’s Trading Cycle may have topped on day 8. If so, this could lead to a failed Daily Cycle and the start of the longer Intermediate Cycle decline. But until that happens, the USD is in a bullish uptrend. Here are a couple of posts:

      See my 3rd chart on the USD in this post:

      https://surfcity.co/category/USD/

      On Gold and its YCL (or just click on the “Gold” tab in the “Home” bar row for all my Gold posts):

      https://surfcity.co/2016/12/20/gold-cycle/

  16. Barry

    Gary,

    Any idea why the 10Y T-Note volume has diminished to next to nothing for the past 2and 1/2 weeks? What might that indicate? A reversal?

  17. Mac

    You think the bond bubble might be popping. Why? You think the dollar is topping. Why? On what timeframe are you talking about, temporary pullback or new trend? Are these views based on charts or do you have a rationale for why you think these things? Don’t know how people act on these without any specifics.

    1. Surf City

      Mac, My cycle work shows that Bonds are very likely seeking out both a Yearly Cycle Low (YCL) and a 3 Year Cycle Low. That said, I expect that TLT/Bonds will make a lower high as the 60 year interest rate Cycle has very likely bottomed here from its downtrend since 1984.

      If correct, Interest rates went lower for 32 years and should now start to head higher over the next 28 years… (i.e. Interest rates and Bond prices are inversely correlated).

      In any case, this post discusses several long term cycles on Bonds:

      https://surfcity.co/2016/12/10/bond-3-year-cycle-low/

      1. Mac

        Thank you for the reply Surf City and I appreciate the clarification that you are using cycles to make your call. The question though was more to get people to think about random calls and question what they are based on. I have said before that I don’t think cycles or any historical charts are able to predict future direction. So I’m really suggesting that people question statements like “I expect that TLT/Bonds will make a lower high as the 60 year interest rate Cycle has very likely bottomed here from its downtrend since 1984.” Why? Is there a reason that you believe this or are you just speculating? I know your answer but I think many new traders take statements like this from people on the internet that they don’t know and factor it into their trades.

        1. Mac

          Well I tried to engage anyone that wanted to think through the reasons for the moves in the bond and currency markets but apparently no takers. If people made any effort to understand these moves I think that you’d see that some of the predictions that are being suggested here are highly unlikely. All I can suggest is that new people take the time to learn what moves markets rather just follow random predictions from strangers on the internet. Also understand that you’re using methods that have no ability to predict the future to try to predict the future.

    1. Pedestrian

      The 50 will spike through the 200 sometime in January on DUST. It looks like an excellent trade setting up. DUST has formed a beautiful bowl shaped bottom and risen considerably in the past two months. I expect that to continue into the first quarter of this year. Gold and the miners who dig it out of the ground are utterly F*****ED and we WILL see gold back below 1000 dollars as miners are left gasping for oxygen again.

      1. ras

        You could be right and it could play out that way. My time horizon is short. Just catch the middle and exit the trade. And try again if a set up presents itself. And, repeat until it stops working.

  19. Robert

    If the bears wanted to destroy gold bulls spirits they have done it fully. There are no bulls left just a few contrarian traders. The constant grinding and stair steps down for 4 months has been been too stressful. I was about to capitulate and call it a day but I just keep remembering December last year same situation. I think any rally on the YCL we should all just look to sell. Gold is too difficult and stressful to trade its not worth it even if we get a big rally. Even Gary is very silent im sure he is stressed out too. The messed up thing is we can still go lower to 1110 before year is over. BTW cycles for gold are not working this is like day 50 something lol it can go another 20 days

    1. Pedestrian

      I am now looking for a big smash in miners during the first week of January. Equity markets look to me they will also start taking a hit very early in the New Year and what equity is left of the gold and silver mining sector is going to take a violent and bloody beating. Get the rolls of bandages out and go liberally with the hydrogen peroxide. There will be nothing but carcasses on most gold sites just two weeks hence.

    2. jeffd5584

      take a step back and look at the Gold chart going back one year (nevermind the cycle’s at this point). That angle of ascent is far too steep. The worst aspect of a market that goes vertical with minimal pullbacks is that it doesn’t build support throughout the move. Instead it “squeeze’s” and then exhausts itself. Just more evidence of a worldwide glut of “V’s” in many asset markets. FWIW, the cycle’s that I see on Gold call for a low around the middle of March.

  20. Bull

    The bond chart looks ready to bounce. Gold and miners look ready for the low volume holiday trading azz ream from the bear.

    2. Pedestrian

      Heard it already and it makes no sense. But then he is the gold and oil guy so he needs to give hope to subscribers. What he said was that he thinks general equities are heading for a correction in the New Year and that is not generally good news for miners. If we saw a 10% decline in the S&P it would be brutal for gold equities since everything goes out with the bathwater. More to the point though, metals trades are more speculative than other stock buying which is typically buy and hold. Expect panic selling of gold stocks into a market correction and a retest of the lows.

      1. Pedestrian

        No idea. I don’t subscribe to anyone but myself and until the other guys start using chicken bones and Voodoo it will probably stay that way.

        1. TraderPete

          I use Tarot Cards, that’s my secret, and it never fails. I haven’t been wrong yet. Sometimes I’ll consult a fortune teller, psychic, or sorcerer, but, I’ve found Tarot Cards to be the best. 😎

          1. TraderPete

            Oh, and don’t forget the astrologers, like Mahendra Sharma. Actually, I prefer astronomers like Sir Fred Hoyle, but he’s passed away.

  25. TraderPete

    Gary, do you know anything about investing in uranium? I understand it is very undervalued and could be a good investment. How do you trade it or invest in it? Do you know? Does anyone else know?
    Thanks in advance.

  26. Goild

    The gold bears may be having a great feast.
    We will let them enjoy drinks and delicatessen; and while they do that
    the bulls will be loading JNUG and NUGT shares.
    Once reality hits gold will spike with a force than will create bear havoc. Just wait a bit more.

  28. zbigkid

    Pento has a pretty good explanation of what and why and potentially when the bond market will break. He says it”ll first go to 3, maybe 4%, reeking havoc in stocks, but then the FED will come to the ‘rescue’, and unleash QE in quantities none of us can even imagine. That will drive rates back down to 2%, before that bond bubble pops for good. Maybe it could all happen pretty fast.

    I too doubt the FED is going to even get off 1 rate hike next year, let alone 3. The FED had this same damn rhetoric last year, and they only got off 1 miniscule hike in 2015, and now more than a year later, 1 more teeny tiny hike here in 2016. 2 quarter point hikes in 1 year, doesn’t even begin to make iota of difference, or impact. Liquidity in bond markets was a major problem before they started this, and has gotten to be even more of a problem. Now you gots China in serious doo doo, trying to defend the yuan that is indefensible in the wake of $30 trillion of debt racked up just since 2011. China was propping nearly every emerging market country on the planet, by buying nearly every resource and commodity they could get their hands on. Now that their build out has come to virtually a screeching halt, or at least a major deceleration, not a one of those EM countries has anything to fall back on. Their economies are toast. So what’s happening, is that every country on the planet, except for the US is falling way behind on the economic development spectrum, unable to keep their respective populations fed, housed, employed, etc. Thus the US to innoculate itself, has to pull back mightily, with all forms of protectionist policies. Trump is right by doing this, as we are talking about survival. We are talking about massive population die offs that cannot be stopped. The flood of migrants, immigrants, whatever you want to call it, into Europe, is about this sheer will to survive, and 10’s of millions are trying to avoid starvation. Its not about trying to stay above poverty level anymore. Our current POTUS, and democrats understand this, and they were trying to be somewhat humanitarian by effectively suspending any criteria for people entering our own country. Capital from all over is flooding back here, which is why stocks are going crazy. Many millions of more middle class and wealthy people will be trying to make their way here over the next 3 to 5 years. This is why you see our stocks and US dollar continue to go higher and higher. At some point though, all the rest of the world’s debt will collapse the entire western banking system. China will probably have to halve their population to survive whats coming. Russia will easily take over Europe, since its the only country with real resources. Many emerging market countries will simply die off, and not have many inhabitants left. More like rogue populations of scavengers with zero governments left in their land masses, since our financial system, and banks have raped and pillaged them all, and exploited them economically. The bond markets cratering will simply be a reflection of all this. Our country will survive but it will be very different.

    1. TraderPete

      Yes, you’re absolutely right; and we owe it all to the New World Order, the Fourth Reich, One World Government, The Deep State, The Global Elites, The Establishment, or whatever name they go by.

  29. TraderPete

    The FSC is projecting the YCL for gold on 1/31/17.

    Merry Christmas everyone and happy trading. I’m bugging out early for the holidays to get some of that holiday cheer and some snaps. 😋

    Tchau,
    TraderPete

  31. 1970confused

    I remember the negativity on the precious metals being exactly the same last year. Gold has been oversold now for 7 straight weeks. Pedestrian, market up pm’s down market down pm’s down, I guess with you there is no winning and you are the perfect contrarian to a market like this. I guess I should go buy myself some Goldman Sachs now that it’s gone parabolic since the elections. Funny how no one talks about that?? When GS comes down back to earth so will the Dow….

    1. jeffd5584

      There is a key difference that you are overlooking. Last year was simply a continuation downward of an ongoing “bearish” market in metals. i.e. less trapped longs (they had been liquidated years earlier). This time around the metals are making a similar move with a train full of longs. Honestly, I sometimes wonder if people stop and look at the comments and see everybody else long and buying each dip and take pause. For every 10 guys who have been long for weeks/months during this decline, I’d bet maybe 1-2 guys on here have discussed the possibilities of the short side for what has been a relentless trend lower.

    2. Pedestrian

      The market is what it is, 70’sConfused. I don’t make the rules.

      But as it stands during ordinary times, gold is running on a correlation with Yen and the Yen is running inverse to the Nikkei. So if stock markets go down (including those in Japan) then that would suggest the Yen rise and gold follow suit.

      However, it does not always work just as we imagine and as a rule, sharp market declines can be quite hard on cyclical/ speculative stock investments. We should therefore expect mining stock to fall. That is the existing direction as it stands anyway and momentum would favour further declines in the near term.

      So keep in mind I am only talking here about what I think is coming very early in 2016. There is no other prediction beyond the first week of January and all I am really saying is that this current metals correction is not done yet. Look at the weekly Yen or Nikkei charts to see what I mean.

      They have not completed their cycles or reached what I would call solid support/ resistance areas and that tells me this trend has longer to run. In the meantime, mining stock (which has until now held up quite well considering the shelllacking gold got) is beginning to look less stable since so many charts lost their major Fibs.

      But its not that the worries me. I was mentioning seasons yesterday and the odds of a market correction that come with a calendar change from one year to the next. If the VIX was not so stupidly low I probably would not have even mentioned it.

      Anyway, I don’t know the future any better than you but I do know how to read warning signs. You can call me a contrarian indicator if you like. Go ahead. Buy the market. I will be the first to congratulate you if your gold mines and stocks make money in January.

  32. Goild

    Today we had a half hook on NUGT. Expect tomorrow the hook to complete and NUGT at $5.55 or lower.
    Though I will keep my two NUGT lots: discipline.

  34. Goild

    dboz,

    We are pretty much close to the bottom. We may go down but hardly in the long run one will lose.
    It is too cheap now. I just happened to find another account to put my hands on. So if it goes down I will buy more shares. Cheers.

  35. dboz

    If we can just get some upward momentum you can tell things are ready to run. Need buyers! Selling has to be about exhausted?

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