Apologies for the very late post today. I had a morning appointment that overran badly, and it’s slower work getting charts done after the markets open and I’m then trading as well as charting.
I mentioned on twitter last night after the close that the bulls narrowly managed to avoid a 5dma three day rule breakdown with a target at a retest of the lows. There was more downside overnight that reached my ideal target on ES at a retest of the 1850 area and ES then reversed back up hard there. There is a strange myth that globex highs and lows always need to be retested soon after. I’ve been watching that for a while and have seen little evidence to support this, and there’s no need to see that here.
This is just kind of a throwaway post, since I hardly ever mention bonds……….but they sure seem to be just kind of meandering their way into narcolepsy at this point. That triangle has to break sometime soon. Anyway………I’d better focus on Christmas, since we’re hosting tomorrow!
As the global and U.S. equity markets stage a huge recovery rally, 10-year YIELD continues to creep higher– to 2.24% from the Aug 24 low at 1.90%– within a larger-developing bottoming pattern (outlined by the red lines below).
Current strength has propelled YIELD up and out of its near-term digestion (flag) pattern that triggers upside potential to challenge its Jan, 2014, resistance line, now at 2.40%.
Only a break below 2.11% will wreck the developing bullish set-up in YIELD.
Originally published on MPTrader.com.
I’ve been shorting again today, taking advantage of market strength. Here’s a new one:
Last night, driving at 1:30 in the morning with my son to find a place to look at the meteor shower, I was telling him about the magical world of Dennis Gartman. I described the entire Gartman meme over at ZH, and my boy thought it was hilarious.
I pointed out on my Tastytrade show last Thursday that bonds looked poised for a lift-off. Well, once the modest resistance (tinted in green) was breached, it was off to the races. Interest rates seem destined lower (obviously).
The following 1-Year Daily chart of 30-Year U.S. Bonds ($USB) shows that a bearish moving average Death Cross has recently formed — warning that lower prices may be in store. However, the rising RSI indicates building strength from May through July.