Looking for a faster idea to understand how works "dagreatcircus" (aka BB or market makers).
Your 10-year bonds are undoubtedly the best coverage each time we read “fly to quality” during the falls (ie 2008, 2010, 2011 and the last one between May and July 2012).
Whenever Mr Market does a drop or a simple correction, Market Makers or BB went to the 10-year bond rate who did it largest retrace from 4% to 1.39% in July 2012.
Hard to reckon for a fundamentalist -like me- but your 10 years bond worked even much better than Bossgold to do the coverage during “bad times”.
Why writing this?
Bossgold hasn’t always gone up when Mr Market did a correction as did your 10 years bond.
That’s the reason why Mr Gross and the American bond market is the most overbought of the planet: very liquid, everybody can buy and sell without problems and USA always paid even during the worst crisis…. (One day this‘ll not happen and surely would be too late for all of us…)
“Wethepeople” and “WetheMarketMakers” savings use to buy the bonds during drops and also dropping the rate (the inverse of the bond).
During the crises, inflation‘s usually low so the bonds runs out of enemies. Nobody wants a bond during inflation’s times (our very typical Argentine specialty this includes “everywhere declining middle class”).
Well, inviting you by “the south” watching some of your indexes, 10 years bonds & rate charts having in front to revise them in no more than two screens.
NUMBERS (Summarizing again for Master Mysman voting Obama against his deepest feelings)
NASDAQ reached closer to 5000 points during March 2000 and SP500 reached level 1575: Mr Market hasn’t been able to close above those ”toppys” in the last 12 years.
NASDAQ walks around a 60% respect the 2000 and SP500 around 95% from 12 years ago
Your 10 years “BillGrossbonds” have clearly won the stock Market during the past 12 years: safer (???) and by an interesting capital gain appreciation of their prices which are the inverse of the interest rate: now watching the chart of the 10 years rate comparing within the stock index charts : the inverse relationship of the rate with your 10 years bonds.
Ratifying and adding more years to the same posted 10 days ago: your bonds did a toppy @ level 5.25% during mid 2007 where began a free fall for a year until late 2008 where the rate arrived level 2.2%.
That rate drop –by a great climbing bond- predicted and anticipate the SP500 largest fall between 1575 (July 2007) and 666 (March 2009).
Now watching how your rate rose from 2.2% to 4% between January 2009 and May 2010 SP500 with a great recovery during the same period: rate increases when Mr Market rises and low rates coinciding –obviously-when Mr Market goes gown.
Now returning to the current year where we can watch a bottom rate @ 1.39% during july by a Mr Market retrace and from there your “fuqy” rate has rebounded to levels between 1.7 / 1.8%.
‘ll continue rising? (Asking to newdaddyMasterNatural, dearest MasterOldfolks&greendaughter, Wackotrader, Aco+risk and all the chart’s students)
If the rate goes up, WS‘ll follow this trend. Consider that according to the charts.
1.39% bottom looks like a very important level ending a 5 moves sequence from the 3,85% peak levels during January 2011. Now should be noted how this wave 5 has done 5 movements from level 2.4% in March 2012 to the 1.39% July bottom which coincided with Mrstockmarket falling.
1.39% shows us a clear reversal key and finishing the sequence from 3.85% during January 2011.
So the south think the rate should return to wave 4 -lesser degree- @ levels around 2.4% in coming months.
The daily chart shows the rapid growth rate between 1.39% and 1.87% (by a typ triangle consolidation that may be over or a decline in the area between 1.65% / 1.70% by a logical and temporarily –current- Mr Market retrace.
If ‘m right, then would be followed by a sharp rise to 2.15% level rate on the way to 2.4%. Exceeding 1.845% / 1.87% we may be sure expecting the 2.4%.
This scenario is positive for Mr Market and was exactly what happened after Q2.
If the rate rises, guess the better predictions for development countries with lower index charts like China, Mexico and Brazil to get a better profit there.