Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by CEO Keith McCullough.
Lets talk about the 10 Year Yield that’s been freaking so many of you out.
Don’t panic. I understand that if some of you didn’t believe in the bond call and you just started buying them like a month ago, you probably should panic. But that’s probably not what you should do next time. You should be buying at the low end of the risk range in bond yields.
A lot of you would say “Wow, I can’t imagine the 10 year yield getting to where it is today!” But that’s just what happens in markets. Every day you get a chance to readjust and change your position within the trend.
You can see on the chart where I drew an epic bounce to the top end of the risk range in Treasury yields.
Now people will say “what happens when the risk range goes higher?” Well that’s what it does. Think of the risk range not like your Old Wall technical support and resistance, but instead a daily target to make good decisions.
So, with bonds near the top end of the risk range, today I’m going to be buying 10, 20, 30 year bonds along with extended duration bonds. That’s what you do. You add to your position when they’re on sale and on pullbacks you book some gains.
Unless... you’re going into a different regime. I'm getting a lot of questions about, “What about Quad 2?”
Don’t worry. I’m readily aware of our model suggesting a transition to Quad 2 in Q4 and I will make that call when my Risk Ranges and our GIP model suggest we should but, for now, I'm sticking with Quad 4 in Q3 particularly ahead of this upcoming earnings season.
