DD Support Board and Research Team

[DragonBear]

I was trying to short the 10 year T, didn't get executed,

What mechanism were you trying to use?

do you think it is a good short term trade.

It hasn't happened yet, but it seems good short term. Also seems like something that would by definition be as volatile as the equities market. Take the Trade War. A Trumpski tweet can either cause sudden euphoric risk-on preventing an inversion, or a flight to safety tanking the 10 yr yield even more.

Then comes the Fed actions. First method to prevent the inversion is to stop raising rates. At least for Dec there's was a 83.5% bet Tuesday it will still be a hike. Will they permanently go on hold, with the US economy showing good data in Nov? More hikes could come short term. The other method for the Fed to prevent an inversion is sort of sneaky nasty - accelerate into a huge dump of their balance sheet. Of course if they did that rates would soar back up, forcing them to raise interest to counter potential inflation. That would whiplash against a Short position. Fed unlikely to do that.

I just don't see the inversion lasting long.

Some say by reading tradition, inversion is followed by 18 months of continued Bull market, then all bets are off. With the Trade War flocking up the works how about 6 months instead? Economy starts to go into a severe Recession, Fed has to stop the hikes. Thus, the predictions the Fed might have to cut in the next 2 yrs.

In summary my magic Glo Orb predicts an inversion tickle extremely soon. As the Fed tinkers with holds, and hikes, the equity Market gets high volatility whiplash due to the Trade War truce falling apart in 120 days. The inversion curve deepening the next 6 months. Thereafter it stalls out, and then starts to recover. Oh let's add in the UST increasing debt issuance due to the increased budget deficit. Good for your Short. Unless the Trade War is resolved, and the Asians help gobble up the debt.