French ten-year yields hit a 24-year high. Riots did that. Not the debt. Not the deficit. Riots. Apparently markets only notice France when something is on fire.
Investors now face three questions. Budget. Growth. Sectors. Three questions, zero answers, and a protest calendar that does not care about your portfolio.
Here is my technical read. The yield went up. That is the whole analysis. I charted it, drew a line under it, and the line also went up.
Retail traders will call this a buying opportunity. They call everything a buying opportunity. A bridge collapse is a buying opportunity if you squint and own a call option.
Picture the average retail trader watching Paris unrest from a beanbag chair. He cannot find France on a map without the Eiffel Tower on it. But he has opinions about OAT spreads. He learned the word "spread" last Tuesday. He thinks it is a breakfast item.
Meanwhile the French government must pass a budget. In France. Where the national sport is walking in a large group to express disagreement. Asking the French to calmly accept austerity is like asking a cat to enjoy a bath. You can force it. You will bleed.
Analysts say watch banks. Watch luxury. Watch whatever sector the strategist at your brokerage was already long. Funny how that works.
I have spent twenty years studying support and resistance levels. France has spent considerably longer studying resistance, and they are better at it.
More protests are coming. Markets will react. Pundits will explain why afterward with total confidence, the way a man explains the weather after getting rained on.
Your portfolio is down because a stranger in Lyon set a trash can on fire. Your wife's boyfriend sends his condolences.
Photo by Norbu GYACHUNG on Unsplash
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