The breakout on bonds?Bonds getting a bid after US housing data showing a recession. If the breakout is real we shouldn't see 139 again. This may be beginning of the "rush to safety". Nothing confirmed as of yet.
www.cnbc.com
BND
The Bounce on BondsPossible inverted head and shoulders pattern points to target of 153. Wait for break above neckline and then retest for long entry.
The Bid for BondsBND looks to have finished it's C wave and now getting ready to rally past most expectations. On the BND ETF, it should make new highs.
Strong weekly bullish divergence and A=C 1.272 which is a very common extension for C. For those looking for a fundamental reason for bonds to rally, I recommend David Rosenberg's excellent interview a few days ago on Wealthtrack - youtu.be/44_kSXbuJYc
Defaanged by bondsThe rush to bonds by the big funds will be breathtaking. As you may or not know I have been extremely bearish on big tech for a few months, now we are seeing that come to fruition.
This chart is qqq divided by bonds (bnd etf). As this comes down, it indicates that bonds will retain or gain value vs tech. This may be the most important financial rotation in our lifetime.
James Bonds vs I SpySpy vs Bond ratio chart. An uptrend means that bonds are outperforming spy.
Monthly bull divergences, monthly PPO about to cross bullish, Slow Stochastic over 21 for the first time in 2 years. This is a generational opportunity for bonds. Chances are good that the economy tanks mid-year and Powell and the other geniuses at the FED rethink the rate hike strategy, so bonds will continue to rally vs SPY. 60/40 portfolio may become 10/90 by next year.
Sell Binance CoinSell from current and 459, stop 525, target 1
Sales from weekly and monthly commercial interests.
Stop at 525.
Risk 80% of the promise.
Closing 50% of the position at 270
(sep. scales) Asia Bond ETF 3141.HK vs. BND, EURUSD, UDN and HSIBMO Asia Investment Grade Bond ETF 3141. HK vs. BND , EURUSD , UDN and Hang Seng Index - on separate scales
Asia Bond ETF 3141.HK vs. BND, EURUSD, UDN and Hang Seng IndexBMO Asia Investment Grade Bond ETF 3141.HK vs. BND, EURUSD, UDN and Hang Seng Index
GBPUSD next week!!GBPUSD still in my GOLDEN FIBO RETRACEMENT zone. waiting for how the price will react in the zone.
i still look for long until at around the blue horizontal line which in HNS daily if you can notice it.
A look at corporate debtThis chart illustrates the increasing importance of cheap money, which is being driven by buybacks. Once interest rates get to a certain point (via Eurodollar futures ) the S&P 500 falls apart. The point at which it falls apart seems to be dependent on a certain downward-sloping level. Historically, interest rates prairie dog above the meme line for a bit but once they go back into their hidey holes the top of the S&P is close. With my luck the Brent Johnson's dollar milkshake theory will probably be right and the complete opposite will happen.
Okay that's great. At least we know yields will eventually make their way down to 0% so... all in bonds then, right? Not exactly. Take a closer look at the available bond funds, specifically the allocation to corporate credit and the ratings of that corporate credit. There is a solid chance that you will see a lot of BBB. BBB is the last level of "investment grade" debt before it becomes "junk". Once it gets downgraded to junk the pension funds and insurance companies that own most of it are required to liquidate it. The BBB bucket alone accounts for roughly 54% ($3T) of all corporate debt and dwarfs the size of the junk bond market and if the downgrades start happening the junk spreads will get blown out.
My prediction: the floodgates will open when a seemingly healthy company defaults due to drop in revenue (and subsequently free cash flow due to being overleveraged) and the ratings agencies are forced to start downgrading companies that should have been downgraded a long time ago.
Fear of being downgraded will finally sink in and companies will be forced to look at their margins and free up cash. The first order of business is reduce largest portion of SG&A: payroll. A gigantic portion of the population is nearing retirement and they will be the first to be shown the door It sucks but that's just how it works. On top of that, all of these people that just got retired are trying to hit some magic number and are either 100% S&P or 100% "X Retirement 2025" fund, which consists of a lot of equities and a ton of BBB garbage that doesn't know its garbage. So no income, no available jobs, halved 401k. Fantastic. Time to downsize but unfortunately there is nothing to downsize to because everyone else is doing the same thing. Only option is to build, rent, move in with children, or buy a double wide. So I like small houses and ELS , which is a trailer park REIT.
Bullish:
High-quality bonds: TLT , BND
REITs: ELS
Bearish:
Trash bonds: JNK , HYG
Insurance companies: the infamous AIG , AFL
TNX 10-Year Yield + Repo Problems + Bonds Extreme LeverageWhen plumbing works well, you don’t need to think about it. That’s usually the case with a vital but obscure part of the financial system known as the repo market.
Bank of International Settlements has been reporting some very interesting documents connecting overleverage by MULTIPLE hedge funds (potentially even my hero Ray at Bridgewater) in the overnight repo market (making a percentage by loaning it out) which is having ripple effects in the TNX, and Bond market - Forcing the Fed to supply liquidity directly from its balance sheet. But the plumbing (Repo=Liquidity) got blown out, and the Fed is plugging the hole with QE.
The about-face interest rate policy from the Fed put significant stress on the overleveraged market.
The Bank of International Settlements is just doing routine reports, I think they don't want to be caught up in it.
Feels crazy, but I think the TNX might fall further.
Stocks and Bonds correlations appear to be absent.
Bond H&S updateupdating the previous chart to look at how this is behaving. Keeps retesting neckline, yet it keeps getting rejected. If broken, this will rally a bit, but I still expect this to head south significantly.
Bond Prices could explode soon!For BND...the 79.80 level is where the problems are. If it breaks up through the 79.80 level decisively the entire Yield Curve will have to invert until everything unwinds. A rejection would be tell tale of Central Bank intervention. They would be buying stocks and forcing everyone into stocks instead of Bonds.
BND : Us Bond Market & Yields. Disconnected and UnbalancedUs Bond Market
Curiously the bond market closed down .23% on Friday
while the us 10 year also closed down 1.2% however
the us 5 year closed up 1.19% . Does anybody see a
disconnect in this relationship ? I believe us treasury
debt is quietly being sold off by china, russia and others
as they have do not have the need to hold us debt in
the same way as they have... historically . There are
better options to conduct global trade vs the us dollar
than has been possible in the past including the rmb,
physical gold and cryptocurrency's . The us financial
engineering has run amuck and the petro dollar is
weakening on a ongoing basis.
BND : bond market bid higherEquity futures all down big earlier
this morning. Now at the open the
"bnd" bond market is bid higher in
an attempt to prop up equity's
So far it is working but will it hold ?
TNX: Nice PennantTextbook consolidation as we wait for more signals from the FOMC. Fed futures showing no hike in March but two hikes by December, expect another leg up once subsequent meetings start pricing in. Good time to scale in.
Ascending triangle on short bond at cycle lows. Price action today is confirming the trend. Worth watching as traders seem to be pricing back in a "lower for longer" trajectory on interest rates.
BND daily total bond market fundI like BND because it gives a good overview of bond market sentiment. Lets see if the market starts to take the impending rate rise seriously. By that I mean if the support fails to the downside.
More downside for bonds in the coming weeksThe ETF representing the Vanguard Total Market is down around 3% off 2015 highs, and about 4.5% off the highest point in 2012.
First, the minor support level at 82.02 was broken, followed by the next minor support at 81.84.
A move below the major support at 81.37 will break the rising channel going back to the September 2013 low, effectively breaking the recent uptrend.
Unfortunately, that's precisely what I'm expecting given the corrective pattern unfolding off the January highs. In Elliott Wave terms, the pattern appears to be a double zigzag (2 consecutive 3-wave abc patterns), labeled WXY. Utilizing the theory that corrective patterns tend to channel around 90% of the time, an area price target of 80.80 to 81.16 seems reasonable for the intermediate term.
What comes next is far less clear in the long term, but a bounce that lasts for a period of at least several weeks is reasonable. A longer term view will require that a new price channel is established up or down, or an 8-wave EW setup (5-wave impulse followed by an ABC correction). I wouldn't be surprised at all if prices were confined in this narrow 2015 range for the remainder of the year.
