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April 23, 2018 | 10-Year Rate Creeping Toward the Red Zone

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

A strong rally has brought yields on the 10-Year Note within easy reach of the 3.11% target first aired here in December, when the rate was hovering around 2.35%.  It’s remarkable that the U.S. economy and the stock market appear to have survived the rally, although it’s possible that by June both could be headed into the tank. It’s difficult to predict exactly how much tightening they’ll be able to withstand, but a push above 3.00% would surely test bulls’ resolve.  Moreover, a further move exceeding 3.22% would trip a Hidden Pivot alarm implying the uptrend could have significantly further to go. It won’t be long before we are able to determine how likely this is. A few talking-head imbeciles have pointed out that the economy has done okay with interest rates at much higher levels.  That may be true, but never after rates had been held near zero for so long. As things stand, a rate of “just” 4% would probably be enough to trigger a deflationary implosion capable of wreaking havoc on all of the Fed’s delicate, misbegotten plans.

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April 23rd, 2018

Posted In: Rick's Picks

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