Dans Post :

BOND MARKET CONFUSION

Even the bonds seemed confused by today’s price action across so many major markets. At one point they were up over a full point on the weak payrolls report. Then, they sold off the session high and are now slightly negative.

The move lower corresponded with the Dollar’s recovery off of its worst price level of the session.

From a pure TA perspective, bonds ran EXACTLY to the top of the trading range and then reversed.

Chart_16-05-06_10-50-45

Makes me wonder if maybe we really have seen the long term top in bonds.

After all, if the commodity sector buying off of the weaker Dollar and the lousy payrolls number continues, then why shouldn’t the bonds look at the sluggish economy and hot money push higher in commodities as inflationary? I am being sarcastic here.

No one knows what the heck to do from any sort of fundamental perspective since those are all meaningless at the moment.

This is especially noteworthy since the yield curve has been flattening the last two days with the spread between the Ten Year Treasury and the Two Year Treasury narrowing by 4 basis points this week.

In other words, we have a yield curve telling us that growth is so sluggish that inflation is not on the radar screen all the while we have binge buying across many individual commodity markets.

Like I said earlier, try not to reason any of this out. Nothing works anymore. All of the former relationships we have had for so many years among different but interrelated markets have evaporated into nothingness.

Matrix reply :

Thank God Dan we made the money we did back in the day when 1+2=3 otherwise I’d be a Walmart greeter

The amount of suits walking around Bay St applying old school to todays market action is scary.

CHEER$!…..hey sorry for posting that pic of you inside the beehive, you really that grey or is that an old picture?

Reply

Trader Dan

Matrix;

hey, my hair was my natural blonde color until two weeks ago when the Yellen fed went dovish and the bank of japan did nothing. Then it all turned gray the next day and hasn’t been the same since!

on the earlier days – yes my friend. We saw the BEST DAYS for trading. The days of the open pit trading were unique and are lost forever. they will filled with colorful characters but more importantly, guys who understood the markets in which they traded. Nowadays , our markets are run by brain dead hedge fund computers which couldn’t tell you one end of a stalk of corn from the other or the difference between a butt cut and a picnic cut or whatever.

Our markets are functionally broken.