Tackle Today: Bond Yields to the Moon
September 28, 2022
«10x in 2 years.»
Traders,
The 10-year Treasury yield is rising for its ninth straight week. What’s more, it’s grown from 0.40% to nearly 4% – a 10x increase- in a little over two years. It’s historic and is bringing untold pain to bondholders. Scratch that. It’s killing all risk assets.
If you overlay the ten-year yield with stocks, you’ll discover they have a near-perfect negative correlation right now. Rates up stocks down. With TNX going parabolic, it’s no wonder stocks can’t find a bottom. Fortunately, at this rate of ascent, TNX is about a week away from tagging 4.5% (45 in the chart), which should be the theoretical ceiling.
Why?
Because that’s the terminal rate for the Fed Funds. There’s a question as to whether the 10-year yield should even get that high because there’s bound to be a recession that pulls rates lower over the next few years.
If you want stocks to bounce, root for the squeeze in rates to ease. Knock it off already.
Video Of The Day: Queen’s Court – Covered Call Management
On today’s Queen’s Court, coaches Emily and Matt have a discussion on #coveredcalls management.
Chart of the Day: 10-year Treasury Yield ($TNX)
Rates have gone parabolic. Go hug a bondholder.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show Replay
If you missed last night’s episode where Coaches Greg & Tyler discussed Bear put management or would like to watch it again, check it out here.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Trade Masters 7:00 PM EST
Every Wednesday at 7 PM EST join us on the Trade Masters where two Coaches go head-to-head to see who can find the best trading setup.
Trading Justice 495: What Bottoms First
Should investors panic or be looking for opportunities in the coming months? Listen to another great episode of the Trading Justice podcast.
Listen to the episode in the player below.
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Legal Disclaimer
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.
