Bond market INKBLOT TEST
bullish (daily), bearish (weekly) and WHAT to watch and how to TRADE week ahead
IF you are looking for a writeup about how once again UoMISSagain MISSED, well, I’m sorry to let you down.
OK, sorry. I PROMISE to NOT POST visuals of how BAD it look when considering PLANS TO BUY A CAR OR A HOUSE … What these DASHED HOPES come down to are simply noted on Wells Fargo’s visual
Cases UP confidence DOWN. With THAT in mind and all the narration aside, when you look at the hard data point relative TO the CONsensus (along with the weeks inflation and other data -- JOLTS, Claims, Productivity and ULC etc ... ) HERE IS WHAT YOU GET
Economic data points are SURPRISING TO THE DOWNSIDE at rates they were back in JUNE of 2020.
Yesterday I had a look at 30yy weekly in order to point out a BEARISH development (trading TO, resisting @ 50wMA of 1.9262) and I’ll carry THAT logic along to the visual BELOW which simply adds 200wMA (2.3834)to the mix.
There are some levels between here (1.92) and there (2.38) and for them I lean on WEEKLY CANDLES with regressed (up)trend and some fibo retracements:
When I say I’m NOT BEARISH it is because I’m also keeping the above WEEKLY visuals in context of the low volume summer-time doldrums in context of DAILY CHARTS like the one below which now have a diverging (BULLISH)momentum signal:
That we ended the week on a BULLISH CROSS with yields PINNED TO LEVELS THAT HELD IN March 2020 selloff (1.9275) is not lost on any of us.
Lets put 30yy aside and focus on 20yy supply in the week ahead. We’ve been able to identify the 5s20s FLATTENING TREND and its STILL OUR FRIEND so we should lean on it to figure out what DIPportunities might look like IF we don’t get outright concessions:
These are GUIDELINES and I’ll be happy to work up more specifics OUTRIGHT or if you prefer, vs 10s30s.
Resistance is NEAR at least on a RELATIVE basis and there will need to be some sort of concession...
And with THAT in mind, I’ll now return you TO your weekend // summer boondoggle festivities but before I do … and in the case you haven’t yet seen / heard / READ our latest MONTHLY … With apologies TO Gordon Lightfoot
IF YOU COULD READ, Fashioned on “If You Could Read My Mind” an ode to the inability to communicate clearly or, as Gordo believes, a very personal retracing of his first marriage’s failure (are there other kind?)…