Treasury Projections – Tracked Almost Perfectly – Appears Things Are About to Get Ugly

Recently posted microstructure projections treasuries, which were right translated two and a half days. The direction and timing of tracked in stellar fashion and we are still looking at a decline in treasuries into mid-December. Key turn dates to watch come in around the 15th. One of the most interesting things that appears to be happening is is that the direction of treasuries and equities are syncing. People in general are not used to this relationship and expect that treasuries trade upwards when stocks trade downwards. It appears that the synced and correlated behavior between equities and treasuries may continue into next year as both suggest weakness into February. It is possible that as equities start to accelerate into the completion of a down move that is possible into February and March - that treasuries suddenly decorrelate and start trading inverse to stocks once again. This is an interesting trap and it is also something that we have seen repeatedly with these central banker distorted and manipulated markets. Disparate markets all of a sudden start trading due to liquidity or manipulation or imbalance in the same direction and then when liquidity stresses change start trading in the opposite directions. This is happened countless times with different currencies vs. different commodities in different equity risks just as investors get used to the relationship the relationship changes. This is something to watch for in the behavior of treasuries, which appear to be linked at this time and for the foreseeable future with the prices of equities.

US Bonds Market Structure {Projection

US Bonds Market Structure Projections 

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