is it LIVE or is it MEMOREX – what is going on w/ fixed income?

great commercial w/ that dude sitting in his chair …

one of the things that I’ve been watching amidst the “noise” (yes, noise) of the talking head pundits saying “rates this and rates that and rates are xxxxx” is, simply, the Fed Funds Interest Rate Futures.  In past posts we have successfully captured swings in the fixed income market via ZB #F, $RYJUX, $IRX, $TBT, $TLT.  they have been swings w/ a backdrop.  What do I mean?  Well, in the back of mind, I’ve been asking myself – “is this the one or is it more of the same?”

Essentially, is it “real” or is it “memorex” …. have the bonds finally “topped” and are rates going  higher?

here’s some past blogs:

• http://www.seeitmarket.com/30-year-treasury-bond-study-bull-market-13842/
• http://bartscharts.com/2014/02/08/fixed-income-pattern-and-october-1987/
• http://www.seeitmarket.com/treasury-bond-etf-tlt-nearing-upside-trading-targets-14647/
• http://www.seeitmarket.com/20-year-treasury-bond-tlt-nearing-price-support-target-14375/

here’s what I wrote a year ago …and the chart to accompany it:

“BUT for all intensive purposes, it can’t go any higher.  It really hasn’t budged, which makes sense.  So, if you don’t like playing the LONG side of RATES down here at these levels THEN monitor the Fed Funds for a breakdown.  Believe it will be a big move to the downside, ultimately, but will be a nice confirmation of a generational low in interest rates has had it’s day and the “trade of our lifetime” to go LONG RATES is at hand.”

So, what has me “spooked?”  Check out this breakdown that occurred last week in the FF#F …

folks, it could be a “breakdown” into the gap and support is found on top of the “open window” and it meanders back and forth into the abyss of low rates.  that 100% could happen … I don’t know.  What I “see” (not believe) is an early indication that 1) this is a big candle and 2) it gapped down and more than likely (look at the past gap downs) it will target the lower end of the range.  IF we close on a weekly basis below that range then get ready to rumble as it could be the beginning of higher interest rates … WATCH CLOSELY.

Punch line: support found on red area – Memorex // breakdown (weekly close below) -it’s real and the LONG RATES could be the trade of a lifetime.

rock on, ok?

Bart

Author: BART

BART is a CMT and an expert a "advanced" pattern recognition used w/in the intermarket analysis discipline. He's also an accomplished Business Development Executive providing solutions to a myriad of business markets. View all posts by BART