Has the Next Leg for Bonds Begun? …

When you look at the weekly chart for bonds, you have to think that maybe, just maybe, the great Central Bank manipulation to global interest rates is coming close to the beginning of the Great Unwind.  Here are some weekly charts to ponder …

20-Plus Year US Bond ETF (TLT) – Weekly Chart

Price is still contained within the weekly downward broadening price pattern … we are in the middle of the 7th consecutive “contraction” warning signaled by my software painting the weekly candles yellow.  What follows contraction?  Typically it is a new expansion phase …

The Price Momentum indicator has shown that price has been in a squeeze for 16 consecutive weeks, which is pretty unreal, and almost all bond portfolio managers are likely fast asleep at the wheel and not prepared for what is going to happen next.

The Moving Average Spread Indicator is looking like it wants to make a second, lower cross-over, which typically is the sweet spot where the best shorts are made.

Where is support for price inside the weekly broadening pattern?  It is around $106.50ish … which is about 14% lower than yesterday’s close.

What would a 14% drop in bonds mean for all those equity holders who are maxed out with their margin accounts??  Probably a little bit of pain!!

Cheers … Leaf_West

Have we Hit a Low in Inflation & Interest Rates?

One of the biggest items impacting the stock market the past several years has been all-time or near all-time low interest rates and by definition, low actual and expected inflation rates.  Eventually this long, long trend will end and we will begin on a new leg of rising inflation.  What will cause that is any one’s guess.

Soybean ETF (SOYB) – Weekly Chart

The long-term trend in Soybeans has been lower … eventually, supply and demand forces will reverse that trend.  The weekly chart has been in the condition of contraction in terms of trend strength, the past 7 weeks.  Any squeeze higher will possibly break a multi-year downtrend and possibly be a coincident sign of a generational low in inflation/interest rates being made.

Cheers … Leaf_West