The Trend Is My Friend

Experienced equities and options trader. Price is the only truth! Always learning, always growing. Tweets are for educational and entertainment purposes only.

[SightBringer @_The_Prophet__]

⚡️The point is this:

The U.S. fiscal problem is politically unfixable before markets force a crisis.

When the bond market eventually demands yields high enough to threaten mortgages, equities, banks, and federal interest expense, Washington will suppress the long end rather than accept the discipline.

That choice transfers the adjustment into the real value of the currency.

So the trade is simple: the government protects nominal stability by sacrificing purchasing power. Scarce assets absorb the escape flow. Bitcoin is the cleanest expression of that regime.

The bond market is the trigger. Financial repression is the response. Currency debasement is the cost. Bitcoin is the beneficiary.

That is the whole thesis.

[Bitcoin News @BitcoinNewsCom]

STAN DRUCKENMILLER BLASTS BESSENT’S TREASURY BOND BUYBACK STRATEGY

Legendary investor Stanley Druckenmiller, Scott Bessent’s former boss, is sharply criticizing the Treasury Secretary’s attempt to push down long-term yields.

In a new WSJ op-ed, Druckenmiller argues Treasury’s decision to double long-dated bond buybacks from $2B to at least $4B per operation risks crossing the line from liquidity management into outright yield suppression.

“Once markets believe Treasury is defending a price, every rise in yields becomes a test of official resolve, and the operations must grow to survive the tests.”

Druckenmiller argues there is no obvious market dysfunction requiring intervention. Treasury auctions are functioning, volatility is contained and markets remain orderly.

With inflation above target, deficits around 6% of GDP and national debt above $40T, rising yields may simply be the bond market appropriately pricing America’s deteriorating fiscal position.

Suppressing those yields also removes one of the few remaining forces imposing fiscal discipline on Washington.

Druckenmiller goes even further, arguing that buying long-duration Treasuries while issuing short-term bills effectively removes duration from the market and begins to resemble a small-scale form of QE conducted by Treasury rather than the Fed.

And once traders believe Treasury is defending a particular level of yields, they have an incentive to test just how committed officials are to that defense.

His solution is simple. Let the bond market determine the price of government borrowing and fix the underlying fiscal problem through lower deficits, entitlement reform and better debt management.

The criticism is particularly notable given the history here.

Bessent worked for Druckenmiller at Duquesne Capital Management after both had worked under George Soros.

There was a compelling story that some of the greatest macro minds of their generation were finally in positions to confront America’s fiscal problem.

Druckenmiller’s op-ed throws some serious cold water on that idea.

If Washington refuses to address the underlying fiscal problem, increasingly aggressive attempts to suppress yields may only invite the bond market to test its resolve.

[The Trend Is My Friend @savvytrader2018]

@Beth_Kindig Odds that the bottom is in have increased dramatically over the past week. If you believe that it goes to two million (30x from here) why mess around?

[The Trend Is My Friend @savvytrader2018]

Well said.

[nextbigtrade @nextbigtrade]

There's plenty of people that are now mentally prepared to "die on the hill" of artificial intelligence, semiconductor, and computer hardware stocks.

They're fully bought into the story, think any lower prices from here are a bargain, and will keep buying even if a Stage 4 downtrend starts and their portfolios continue to get detonated.

"The story" is now their shield against anyone who says they are wrong.

In reality though this is how major losses are created as all sectors go through the four stages of Stage Analysis eventually no matter the fundamental story.

Cryptocurrency people just learned this the hard way from 2025-2026.

This is why Stage Analysis shines above fundamental analysis because it aligns with supply and demand, instead of fundamental theories and stories.

[Afshine Emrani MD FACC @afshineemrani]

1/ I'm a cardiologist. I've practiced for twenty-five years, through a lot of "breakthroughs" that turned out to be press releases. So understand the weight of what I'm about to say: I have never seen a single week in medicine like the one we just lived through.
In the span of a few days, four separate scientific breakthroughs landed. The stock market treated them as four unrelated stories and sent a handful of biotech companies soaring. But that's the shallow read. Look closer and they are not four stories at all. They are four faces of the same story — the biggest shift in medicine since the discovery of antibiotics.

Medicine is becoming programmable. Individualized. Written for one human being instead of the average of millions.

Let me walk you through exactly what happened, in plain language, and show you where this is actually headed. Because the future arrived quietly this week, and most people scrolled right past it.

[CyclesFan @CyclesFan]

$BTC will close above its 200 day MA, something which didn't happen during the previous bear markets. That has significantly increased the odds of the bear market low being in, though technically that will be confirmed only if it breaks above the May high at 82814.

[Luke Gromen @LukeGromen]

This could prove 100% accurate if he swaps ALL the Federal debt for T-Bills, then uses those T-Bills to back 0% yielding stablecoins, then cuts the rate on those T-Bills to 0.60% (b/c the banks don't deserve 3.5% on stablecoins).

You're gonna want to own more gold & BTC though.

[Raoul Pal @RaoulGMI]

The Bessent Put

Today the US Treasury doubled the size of its long-end bond buybacks, the day after the 30-year yield hit a 19-year high at 5.33%. The extra dollars are small. The signal is enormous.

For the first time, the fiscal authority, not the Fed, stepped in to defend the long end within 24 hours of the highs. There is now a put under the long bond, and the market has just been told the top of the range...

Look at the plumbing underneath it...

The buybacks pull old, illiquid bonds off dealer balance sheets and get funded at the front end with bills, which the banking system absorbs. Duration out, money-like paper in. Lower long-end volatility raises the collateral value of every Treasury in the repo system, which is itself a liquidity easing. And the QRA language quietly changed two weeks ago to allow exactly this.

It isn't happening in isolation. This month's joint yen intervention was about stopping Japan from ever becoming a forced seller of Treasuries, and the new dollar swap lines across Asia and the Gulf keep the region's dollar debts rolling, with China the ultimate beneficiary. A weaker dollar is the tool that brings the big foreign buyers, Japan and eventually China, back to the long end. Supply managed on one side, demand rebuilt on the other.

With a long end now potentially anchored, the steepening of the curve should come from Warsh, who will probably deliver his part of the grand bargain between the Fed and the Treasury.

All of this is to fund the hyperscaler capex along with government debt. For the first time since the GFC both public and private debt as a % of GDP are growing and both are vital.

This is the everything code fully at play and brings together many threads I've been talking about for the last two years. The debt must be serviced and liquidity, by whichever mechanism they can route it, is the method.

Financial conditions started easing through both legs at once today, and financial conditions are the first domino in the sequence we have been mapping all year.

To be warned this is not an instant liquidity flood happening right now. This is the entire scaffolding being set up for the much larger game. The Great Game is the funding of the aging population along with the funding of the new demographic of AI and robots. Both games are too big and too important to stop. The funding of the the intelligence build out is the most important game of all time. It is too big to fail.

The full Flash Update is coming for GMI and RV Pro members came out earlier today: the full mechanism, the 2011 and 1940s precedents, what it likely means for every asset class, and what would prove the thesis wrong.

Overall today was a big marker point on a story that I've been predicting for many years and have the receipts to prove it. The outcome is always MOAR COWBELL!

[Lawrence McDonald @Convertbond]

HIGH ALERT - We MUST pay attention...

Regime Change - This is soft yield curve control. The headline numbers seem small, but if they are starting steps down this road, that's ALL that matters.

https://t.co/aDOJo4a8sp

[Porter Stansberry @porterstansb]

LONG DURATION IS NOT INVESTABLE
On August 13 the Treasury sold $25B of 30-year bonds at a stop-out yield of 5.216%. That's the price where the auction cleared. This was the highest stop-out yield in 25 years. The era of cheap money is over. And the clock is ticking on the entire Treasury market.👇

[Caleb Franzen @CalebFranzen]

I used to spend a lot of time trying to explain WHY stocks were going up.

It was mostly futile & driven by hindsight bias.

And it didn't actually make me a better investor.

Then I realized it's far more useful (and easier) to just focus on the fact that they're going up.

[Deep Inference @DeepInference]

I don't post dealer positioning often. $SPY $QQQ

Not because it doesn't matter. Because most of the time it can read noisy if you don't pair it with other data.

But right now it looks like the greeks are showing something worth our attention.

Let's take a look together. 🧵

[The Trend Is My Friend @savvytrader2018]

How does the AI trade unwind?

[Francesco @FranVezz]

William O’ Neil and Stan Weinstein both said that stocks will often top when their fundamentals appear at their best.

Have a think about that for a second.

[The Trend Is My Friend @savvytrader2018]

Was the Yen intervention a key inflection point?

[Lawrence Lepard, "fix the money, fix the world" @LawrenceLepard]

YCC is coming into view.

[The Trend Is My Friend @savvytrader2018]

@CyclesFan Similar to $GDX after it’s momentum top in Feb. (which just now completed C wave)

[CyclesFan @CyclesFan]

$SOXX had a bullish reversal this week but I as I stated previously, I believe the crash isn't over yet. I'm considering the current bounce a B wave that could get to as high as the 62% retracement of wave A($583). Then I expect a C wave down that will take it to at least $410.

[The Trend Is My Friend @savvytrader2018]

@waitmaya Where x=prior number.

[The Trend Is My Friend @savvytrader2018]

@waitmaya 31.
X(2)+1