The Ten-Year Went Through 5%

The ten-year yield went through 5% and kept going. It touched 5.014% Monday, the first time over 5% since October 2023, slipped back under by the close, and this morning it is above 5.03%, the highest since 2007, with the 30-year at 5.37%. A hike tomorrow is priced above 90% on CME FedWatch. The meeting opens today with only Empire State and import prices at 8:30 in front of it; retail sales lands tomorrow morning and the decision at 2 PM. SPX closed 7,619.98 Monday, down 0.48%, the Dow off 152 points and the Nasdaq down 0.56%, with Nvidia off more than 3% and the chipmakers sold hard while Alphabet and Microsoft rose. Premarket 7,605, down 15.

A hike is as close to certain as this cycle has produced, and the long end is selling off into it instead of taking relief from it. Treasury tripled its buyback on the 10th and yields rose the same day; Friday's in-line CPI bought one session; now 5% is being paid with the Fed a day out. A hike answers inflation, not supply or oil, and supply and oil are what is being priced, which is why each relief this month has been shorter than the last. Monday's equity tape said the same thing backwards: when the labs said slow down, the companies paid to build were sold and the ones that get to stop spending were bought. A rising capex line got punished for six weeks. A capex cut just got bought.

Premarket 7,605 is 25 under the flip at 7,630, between two dense negative blocks: 7,595 and 7,600 hold the put wall and close to -6,000 ten points under price, and 7,615 to 7,620 packs another -3,400 ten points over it. Dealers amplify here, so whichever block gives first, the move through it travels. The call wall at 7,660 is +782, twice Monday's, with the 13-day and 21-day within two points of it, so 7,661 is the ceiling. Above the flip the positives sum to under +4,400 against roughly -32,000 below it, about seven to one, and the 50-day at 7,610 is now overhead by five. Monday tested both ends: the high was 7,647.99, the reclaim level to the point, and the low 7,592 went six under the shelf before the bounce.

The lean is short, and rallies are for fading at 7,631, the flip and prior demand together, until 7,641 is reclaimed, the 8-week EMA and the first positive strike. There is no long case between them. Do not press a short into 7,598: a put wall ten points under price bounces hard on first touch, as it did Monday. A close under 7,598 is the decisive event, and the negatives run unbroken from there to 7,550.