My work has triggered preliminary signals that the correction of the Sept-Dec upleg in the ProShares UltraShort 20+ Year Treasury (TBT) ended at yesterday’s (Jan 12) low of 38.19, and that a new upleg has commenced.
Let’s notice that the 24-hour upmove from 38.19 has stalled just below 39.90, which represents the resistance line off of the Dec high, and which, if (when?) hurdled, will trigger upside potential that projects to a retest of the Dec-high zone at 41.70 – 43.00.
Only a decline that breaks 38.19 will neutralize the constructive chart set-up.
Mike Paulenoff is founder of MPTrader.com, where he provides live intraday analysis and trade alerts covering the equity, commodity, and currency markets.
2017 is likely to be an interesting year, and the tape has already shaken off the December cobwebs and is moving again. On the bigger picture the chart below is how I’m seeing SPX on the monthly chart here, and the key message is that the bull market from the 2009 low here is most likely topping out or has already topped, though that doesn’t mean that SPX will necessarily drop much in 2017. This has been an eight year bull market and if we see the retracement that I’m looking at on the chart below, then we may not see that bear market low until 2020/1. If we see that 50% retracement then that would be a beautiful fibonacci move, and should then set up a very nice long into the next bull market.
I had to add all the !!!!! because as in the mainstream media, this little outpost wants to get your attention and get you all riled up. Here’s the headline (from Bloomberg, which I actually like a lot more than the average financial media backwash).
 Just yesterday we highlighted the same MSM entity publishing some very sound words by Barry Ritholtz on a related topic.
Clicking the headline yields the article…
So the charts say the last gasps have been taken, do they? Oooh, the charts…
FOMC day again today and as ever I’m astounded by the number of people hanging onto Yellen’s every word, and what a market moving event this tends to be. Even more amazing is the importance that everyone seems to attach to the Fed’s ‘control’ of interest rates, and in the event that they show a small sliver of backbone today and take the tiny step of increasing the fed rate from almost nothing to a little more than almost nothing, then this will be extensively debated over coming weeks as though it really matters.
The truth is though that the fed rate only really impacts very short term interest rates, and that anything longer term is determined by markets in the form of the yields on the ten year (TNX) and 30 year (TYX) treasuries. The Fed has little influence over these as far as I can tell, and doesn’t appear to employ any technical analysts good enough to allow the Fed bigwigs to comment intelligently about them. On a good day their forecasts for these are fairly random, and on a bad day (late 2013) almost perfectly inaccurate. Anyone genuinely interested in bond yield direction should be watching Chart Chat at theartofchart.net twice a week, or at minimum coming to our December forecast for the next year, which this year (for indexes, bonds and currencies) is after the close tomorrow and free to all. You can register for that on this page here if you’re interested.
Yesterday was a an unexpected trend day. Usually trend days arrive on Stan’s cycle trend days but not always and yesterday was one of those exceptions. The double bottom targets that I gave on Monday morning for ES, NQ & TF have now all been made, and obviously this move is developing faster than I was expecting. This increases the odds of making the next significant high in mid to late December rather than January.
The trend day yesterday clarified the pattern setup here nicely on NQ & TF. Less so on ES, but that too is likely setting up for some retracement here. The obvious target would be rising support, currently in the 2218 area. ES Dec 60min chart:
90% (my low-balled estimate) of you, the investing public, are herding when it comes to the bond market. You may not know it because the overwhelming psychological atmosphere is to reaffirm, not question peoples’ behavior. That is what herding is; a comforting feeling of going with the flow and being at one with your environment and the greater zeitgeist.
Now, please don’t be offended by the title; you dear reader may well be one of the 10%. But out there in the financial investment realm, they are herding, BIG time, as bond yields are expected to continue rising, because… media; because… “Great Rotation, part 2” and because… the story of epic secular changes and the chance to be early and clued in to a great new market phase are so alluring.