Credit Flow Investor

IN BOTH CASES TLT MUST BE OFF THE RECENT 2-3 MONTH LOW ( a significant run-up).

Jul 2019 +8 OFF recent low

Jul 2024 +5 OFF recent low

3 GHA bars before Fed meeting…

TLT GHA July 30 2019

Now July 2024…

TLT GHA

Federal Reserve Chairman Kevin Warsh flagged that underlying inflation is not slowing during his speech at the Jackson Hole Economic Symposium.

Chairman Warsh downplayed the funds rate as the preferred tool to fight inflationary risks in favor of a smaller Fed balance sheet, and continued to criticize forward guidance

My comment-

rates to remain unchanged and FED now fighting inflation.

negative payrolls or retail sales won’t cause him to panic and start dropping rates.

He is also reducing QE to cut inflation….

For a break-out-

A good pre-run is +5 by 4th week of October

or

82 + 5= $87 or 50% retrace

This week 1 year treasury yield actually went up +0.11% !

When the cycle changes, and the FED does its job, the long bond can move much faster than the 1 year treasury and even become somewhat detached.

But still up 30% over last year….

High interest rates + gas are still killing the economy.

Imagine! 5 months up on interest rates! (Mar-Jul)

Your computers won’t tell you that!

40 wk X 100 wk in May

23% out-performance on SPY or 3:1

Since May-June WMT down….

at +10% you are in a bear market or bad economy…

M2V now hits 0

At end of June…Q2 +7%

WS is greedy…why not keep commodity prices high as well? Lets make money on SPY+commodities.

BUT that also kills the economy and leads to a market correction.

1yT starts discounting the coming correction first.

1yT continues down…

Why did long bonds do badly in July and August?

Because the trend was down (6 months downtrend). They will show signs of turning by end of August.

THE TREND IS YOUR FRIEND. (until the end).

AND 1yT has a very good downtrend from 5.5% in May 2024 so

economy is slowly weakening with some market hiccups along the way when short-term economy shows extra weakness.