My read of the current price structure for the market-leading stock sector (tech or the QQQ’s) match up pretty well with my read of the price structure for bonds … bonds are pushing into a logical support SLOT zone while the Q’s push into a prior high and a logical termination zone for the 2nd of 3-waves I am looking for from stocks. Here are the charts …
US 30-Year Treasury Bond Future Contract (ZB) – 195 Minute Chart
I have been calling this move in bonds pretty well for the past couple of months … I think that we should see the long bond find support in the SLOT support zone – we are right at the important 61.8% that often acts as support/resistance during corrections. The FOMC meets June 12th and 13th, and bond moves often happen/begin around those FOMC dates. Maybe bonds bounce around here for about a week before beginning what I think will be either a Wave 2 or Wave C move to the next level of resistance.
NASDQ 100 ETF (QQQ) – 195 Minute Chart #1
Everybody is pretty hopped-up with the break by equities out of the big multi-month consolidation patterns they had been making. When something is so obvious that “everyone” sees it I begin to worry about a massive failure/fake-out move … aside from that minor concern of mine, it appears to me that the Q’s are pushing right into an obvious level of resistance for a Wave 2 of a 3-wave price stucture. Wave 2’s typically fail in resistance right at the 1.618x extension target … we are right there for the Q’s now. To top off that obvious target is the fact that we are also pushing right into a prior pivot/all-time high – what are the odds that we blow right through that level and tack on another 5% or so without pausing?? I think it makes more sense to see a fake-out and consolidation/corrective price action which would set-up a more sustainable break to new highs.
NASDQ 100 ETF (QQQ) – 195 Minute Chart #2
Cheers … Leaf_West