(Feb 17, 2021): Today May Be The Day That Long Bond Yields Peak; Equities May Rally Further, However

Summary

• Let's see if the Masters of the Universe (Primary Dealers) finally lets up on bond yield push higher. Today may be THE DAY the long bond peaks on liquidity outflows.
• Just be on guard however. Pre- or early NY trade may see them give the long bond yield another kick-in the backside. PAM unwinds the long TMVs before auction time.
• There should be limited scope for yields to go higher after today's auction. Once the MOTUs have the securities, they will want to sell at a higher price (lower yield).
• Also, the MOTUs will be paid on Monday by the Treasury for the $55Billion paid down by the Treasury as announced yesterday. You can be sure the Primary Dealers will be "encouraged" to use that money to buy long term securities. There is limited scope for yields to rise further, at least over the next two to three weeks.

Robert P. Balan runs Predictive Analytic Models, #1-rated trading unit at Seeking Alpha. PAM trades Swiss HF funds using Federal Reserve, US Treasury, and term (money) market liquidity data flows as basis for trading decisions. He is domiciled in Zurich, Switzerland.

Robert Balan has 5 decades of experience in the financial markets. Education in Mining Engineering, Computer Science & Engineering, M.S in Quantitative Finance, and training in Economics led to a commodity analysis career during the commodity boom of the early 1970s. Robert made a switch to global macro focus in the early 1980 when the commodity bull market waned, with specialization in foreign exchange. Robert wrote a very high profile daily FX analysis while Geneva-based (Lloyds Bank Int'l) in the mid-1980s (the first FX commentary with a real global readership, "most accessed" in the Reuters and Telerate networks from 1988 to 1994).

He worked for Swiss Bank Corp and Union Bank of Switzerland (precursors of today's new UBS) as head of technical research in various finance centers (London, New York, and subsequently, head of prop trading at SBC in Toronto ) from the late 1980s to mid-1990s. A stint at Bank of America as head of global technical research followed in late 1990s to the early 2000s. 

Robert returned to Switzerland in 2004 as head of technical research and strategy, and FX market analyst for Swiss Life Asset Management in Zurich. Robert wrote FX analysis and capital markets commentary for Saxo Bank (Denmark) in the early 2000s. He joined Diapason Commodities Management (CH) in Lausanne in 2008 as senior market strategist, and subsequently Chief Market Strategist, utilizing fundamental macroeconomic drivers and structural/technical data in modeling asset price and sector movements. 

Robert wrote a book on the Elliott Wave Principle in 1988, which has been hailed by the London Society of Technical Analysts as best ever book written on the subject. Robert is a member of the National Association for Business Economics (NABE), U.S.A.