I have a bad feeling about the US bond market….
Price of $TNX (10 year interest rates) has finally come down to test the key rising 600 day MA (basically the equivalent of the 100 week MA) after a massive “high consolidation.”
I am expecting price to be “up up and away” from here (i., e., bond yields to explode higher). Maybe tomorrow’s Jackson Hole speech will throw some uncertainty into the mix for a week, but I think there is greater probability that whatever comes out of Jerome’s maw tomorrow will send bonds yields higher.
The big question is what happens to stocks and commodities in terms of relative and absolute performance when the USD and bonds are tanking simultaneously?
I am expecting US markets to rise in nominal terms along with commodities, with commodities finally breaking out vs the US stock market.
Below, TNX compared to bull analog AMD for your consideration. The first two charts are meant to demonstrate how similar these two bulls are technically speaking. Notice how AMD rocketed higher for about 5-6 months after it tested the 100 WMA. But for Jerome instituting yield curve control, I am expecting the same thing more or less with TNX over the next 5-6 months.
The last chart shows what AMD has gone on to do (one of the best tech stories ever IMO due to their amazing CEO).
I think the comparison is apt, since they are/were both coming out of massive long term bear markets (AMD obviously has been in a raging bull for years already).
You mean yields up and away I assume Nauty
Price Down
right ?
Yes, yields up, so TNX “price” up.
On my charts, major bottoms tend to form when two of my volume based indicators both get oversold on a monthly chart, such that
Fast drops under 10, and Slow drops beneath 30. (0-100 scale)
TBT is the short ETF for longer term treasuries.
TBT as its covid lows hit 2 and 12. at $15
A year later, after a rally to $22, it corrected and hit 1 and 9 at $17 (but made a new low soon after, then rallied there at $16).
Those indicator lows haven’t been matched since. Until now.
We’re at 2.5 and 14 currently.
So yes, there’s a good bet that yields GO UP from here, soon.
Certainly by Q4 I would say.