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30 Year Yield, etc...

|Includes: DIA, GLD, IEF, QQQ, SPY, ProShares UltraShort 20+ Year Treasury ETF (TBT), TLT

Hmmm, it is silly season and the markets are levitating against my short positions. The precious metals correction that NFTRH had anticipated is well in progress. I remain long there. So, by extension I must be pretty bummed out, yeh?

No freaking way. Momma always told me to have patience... and a plan. I do, and if nothing else I look on with a sort of comic bemusement (if that's possible) and await resolution. Noise baby, noise.

Speaking of which, last year during the deflation scare, somebody sent me a particularly good bit of noise, the self-proclaimed "scariest gold chart in the world", targeting gold at below 400. Now, it is easy to produce charts like that during a deflation when there is little apparent chance of the metal actually breaking to new highs, as it ultimately did a few months later.

This is the kind crap that comes out and reinforces the popular sentiment. Right now, that dynamic is going on in the markets to the upside. Well, I will show you what I think is one of the scariest charts in the world; the yield on Larry's 30 year bond.

See the baby inverted H&S (green) that has already broken the neck line? That targets close to 5.2%. If that target comes to be, then we will have broken the neck line on big bro (blue) and its target of 6.8%. How do you think such a rise is going to play with the macro wizards and their ability to sell US debt around the world? At best, I could envision a self-reinforcing buyer's strike on US treasuries as would-be buyers await maximum yields for buying the debt of the hopeless and chronic inflator. At best.

Disclosure: No position in long term US treasuries