Everyone cheering the 10-year auction is walking straight into a trap

[Nico Brooks 71]

Ngl seeing everyone pop champagne over this latest 10-year Treasury auction is wild to me. The mainstream media and half the chatter on here are acting like US bonds just solved all our problems while Europe burns. Hold on a second, are we just ignoring the massive supply coming down the pipe and stickier inflation? Sure, the auction went okay and yields dipped a bit, but this feels like a classic dead cat bounce in a secular bear market for fixed income. Everyone is buying the narrative that the Fed is about to pivot and bail everyone out, getting massive FOMO over a tiny relief rally. I’m fading this strength because the debt load isn't going anywhere and foreign demand is super sketchy long-term. Am I the only one actually looking at the macro data instead of just trading the headline pop?

 

[LeoSterling]

Bro you're so right, macro guys are completely clueless right now. Total liquidity trap before the real flush. SL hit on my long this morning and now I'm just watching the bloodbath. Send it down already, let's get it over with.

 

[EthanCole]

SL hit on my long this morning and now I'm just watching the bloodbath. Send it down already, let's get it over with.

Man, getting chopped up in these macro knee-jerk reactions is the absolute worst. This is exactly why I've been sitting on my hands all week. The 4H chart is just a disaster of noise and fakeouts right now.

Honestly, best thing you can do is step away for a bit. Let the daily close actually tell the story instead of trying to trade the intraday chaos. Patience pays, let the market come to you.

 

[JulianCraft]

Patience pays, let the market come to you.

Sitting on hands is the only smart move right now, but waiting for a clean daily close won't change the macro reality. Inflation is turning back up, commodities are heating up, and the Treasury still has to dump trillions in debt onto the market this year.

Anyone cheering a single decent 10-year auction while CPI is still sticky is out of their mind. Yields are going back up and the Fed is nowhere near ready to cut. Market is in complete denial.

 

[Mason Brooks]

SL hit on my long this morning and now I'm just watching the bloodbath. Send it down already, let's get it over with.

Honestly, be glad that SL hit. Too many guys in here are probably averaging down on a falling knife right now because they think they're smarter than the bond market. If you kept your risk to 1% or less of your book on that long, a stopped-out trade is just a minor cost of doing business.

@JulianCraft is spot on about the sheer volume of debt the Treasury has to dump. This volatility isn't going away. If people aren't aggressively cutting their position sizes to account for this massive ATR expansion, they're going to get absolutely carried out. Keep the stops tight and the sizes small, or this market will do it for you.