MBCC Trading Highlights 23rd September'22 - Bond markets are broken!

As you can see in the chart above, the momentum continues downward. We have broken the 3830 support and now gotten right down to 3785, and now close to retesting the 3650 lows of the summer. We have maintained our bearish view for the past few weeks as our forward looking cross asset signals have been flashing RED. Equities are the least sophisticated asset class to play catch up and we can see the Bond markets collapsing with US 10 year yields are now > 3.80% and distress in both High Yield and Junk bonds, they are lower than where the Fed bought them in March 2020! This is NO longer about value or how cheap or oversold it is, when macro cross assets implode, it is about pure de-leveraging. We are now moving towards a liquidity crisis, strangely enough that is what the Fed “needs” to see before being able to do anything.

Will the market hold onto its summer lows of 3650 or break lower from here? Why Oil keeps dropping and how much lower can it go? Silver is back down to $19, can it break lower despite how cheap it is? All this and more in today’s note with a live trading portfolio.