the “new normal” in Fixed Income …? Ugh …

the balance, form and proportion of the TLT, Long Bond 3 drives to a to “was” as good as it gets … but, patterns work and patterns fail, right?

I’m not sure what the “new normal” touted by Fed Chairman Yellen means .. just yet.  But, PATTERNS and basic technical are showing an increasing rate environment.

so, if at first you don’t succeed try try again?  ugh ….

here’s a monthly, weekly. daily snapshot of the long bond this weekend:

  • bullish sentiment is off the charts
  • divergences on all three time frames
  • Monthly – when drawing trendlines try to shift the orientation to the first move up .. that way you will incorporate PRICE and TIME. From there just simply draw a 90 degree angle. once done, as you can see, you have all of the major trend lines FOR THE LIFE OF THE SECURITY done.  we have another key trend line coming in/around 174.
  • Weekly – note the PERFECT time and the butterfly and the divergence what was present back a couple months ago. it hit, worked and then got smoked.  PATTERNS LIKE THIS DON’T FAIL OFTEN and when they do it’s usually a STRONG MOVE that continues.  Hence, higher targets possible…
  • Daily – nice little pullback on Friday, but I am going to watch 166 as support.  this last move out of triangle is “usually” terminal (a 5th wave) but in the new normal, who the hell knows, right?  Also, note the daily divergence present ….

So, here are the charts – sure looks like the next opportunity to get short bonds is in/around 173-176 on long bond continuous.  watch corresponding levels for TLT as posted earlier.

have a GREAT weekend.

Bart

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