10yr may kill Dow

Discussion in 'Trading' started by ESsniper, Nov 4, 2009.

  1. ESsniper

    ESsniper

    While everyone was watching the SP after the Fed, did anyone
    notice what the 10yr did?? Rates moved higher..

    As many of you know, how tightly correlated the Dow is to the dollar. Think of 2 weeks ago..the dollar spiked intraday, the Dow went from up 100 to down 100 in a matter of minutes.

    The bottom line, if the trend in the 10yr catches traction tomorrow, and this begins to spook the dollar shorts, well you know the rest of the potential story.

    Sources all over have said for weeks how huge the short dollar carry trade is, a virtual money machine, played from all over the world. The potential reversal could be dramatic and affect not only stocks, but crude and Gold as well.
     
  2. Yes... If the Fed music stops (or the mkt thinks they can't play forever), the party can come to a sudden and painful halt.
     
  3. Yes. Only one thing can happen. Either gold goes to the moon, or the indexes crater into oblivion.

    I don't get why so many gold bugs call the end of the world, and at the same time call for a stock-market crash. It's possible, but so highly unlikely. :eek:
     
  4. I thought if rates moved higher, treasury prices were declining meaning a declining dollar??...possibly because people think there might be a rate increase in the future?? correct me please
     
  5. AyeYo

    AyeYo

    That's exactly what I thought. I'm a little confused...
     
  6. It really wasn't much a move. Just typical post FOMC whip
     
  7. yeah i think essniper is confused, unless someone else corrects what I thought...bondtrader50???
     
  8. Bond prices go down, rates go up, all else equal, ccy appreciates, by interest rate parity.