10 YR rates – October 18, 2023

The TLT trade at 84 https://bartscharts.com/2023/10/13/tlt-october-13-2023/ coincided to the day w/ Uranus moving 84 degrees helio. From an astrological perspective, degrees of movements of Uranus are important for bonds/fixed income – or so I am told. 😉 The chart appears heavy and certainly thought it would close below and keep rolling but .. it lived, for now. honestly, not too bullish on it but what do I know. But, that started to change when I went and took a peak at the 10 year interest rate chart – $TNX.

The bonds are in a complete route … that being said, I’m trying hard to not look at the fundamentals because 1/ I don’t understand them and 2/ I’m just a simple pattern guy.

We have confluent technical indications that the bond route “should” be coming to an end, for now. I know there is no justification for this from all the talking head pundits … but I’m just looking at the chart.

  1. A pretty clear Elliott Wave count showing we are in a 5th waves and it sure could be complete.
  2. A weekly bearish divergence in the RSI from the last peak. Yes, it’s not a lot, but it has “not” exceeded the last peak.
  3. Two 1.618 extensions and the most important one being from 5 years ago. They overlap almost exactly. The last one, well, that’s from the wave 3 high and, that one lies exactly on top of the first. NOTE – both of these highs we used the extension from topped in October …
  4. Mr. Measured Move – blue arrow
  5. Some other stuff

So, this is looking as the first “real” opportunity to stop this runaway train of rates … but, this train WILL GET GOING AGAIN as I’m counting this as the first wave completing/completed in a 5 wave sequence. (remember folks, wave 3 can’t be the shortest, so get ready. now that doesn’t mean it has to be long as wave 1, then it can’t be shorter than wave 5.) The characteristics of the 3rd wave usually mean that it will equal or exceed wave 1.

To put wave 1 in perspective from a percentage move it has just been a 1,483% rise in interest rates since the low. IT IS JUST GETTING STARTED.

If we blow thru this level – and, of course, why not – then it’s pretty conceivable that we could roll all the way up to the .382 from the 1981 high in interest rates. What do you know?

Bonds – August 22, 2023

Last post on bonds: https://bartscharts.com/2023/07/30/bonds-july-30-2023/

Well, rates are spiking and bond prices are falling like a stone. Yup … and to think, folks, this is just wave one down. As discussed about a month ago, the target for this ending wave down is now around 110 is and then, still, the zone lower in the 98-103ish …Who knows, if you think about it.

IF my count is correct, THEN this will be a wave 2 in a bear market in bonds that could last years …and, if the recent wave 2 / b wave in the equities market is any barometer I believe this bounce will be BIG because the narrative of “inflation is under control” and the “fed is easing” and blah blah will come out and EVERYONE will think, that’s it and back we go to tinsel town. BONK.

Just counting … that ain’t gonna happen. Might we get some rate cuts in the upcoming bounce? Sure … Might rates naturally drift back down and blah blah blah blah – absolutely. Folks, it might seem that all is GREAT again.

But, it’s just wave 2 folks. Bonds have been going down for almost 3+ years … a 6 month to a year bounce – CERTAINLY in the cards.

So, I’m going to keep my TBT position ON as I’m going to ride all the waves (like UNG, cough cough – what the heck, why ain’t that thing moving …?) but I’ll be a BUYer of TLT for this bounce.

Why not? Nice bullish divergence on the weekly and monthly w/ some good targets. So, guess we’ll see.

NOTE: it’s getting pretty squirrelly out there … I’m pretty confident in these levels on the 30 year continuous chart. VERY in fact – one of them will stop this free fall. If they don’t, and the bonds fall right thru these levels – I’ll be shocked and awed. LOL … no kidding, the Bond market in a free fall is really an “other” on the good/other scale.

Bonds – July 30, 2023

sounds crazy, but sure looks like bonds are going to break the big support that’s been holding em’ up and, frankly, target the blue zone as shown in the below charts. Ummmm, ouch. Right? If my count is wrong, then we will go up and do another leg to finish the a-b-c corrective move BUT either way, I feel pretty good w/ the count from the “big” top above perspective so we “should” be going down in bond prices regardless of the news and then we find some pretty big support and a BIG WAVE 2 or B Wave will get everyone thinking “inflation is over” and the rates are GOING DOWN and yeah team … but, that’s just gonna be the wave 2 or the B wave … after that is the “ouch” 3rd or C wave and rates are gonna explode …

Here’s the TLT (I AM LONG TBT) look that could, realistically, get targeted over the long term. I know, hard to believe … just calling it like I see it.

Interest Rates – July 06, 2023

I posted the chart below a little while back … it’s a chart of the ten year interest rates and what I’m trying to show is that, yes, banks and a lot of people got caught w/ the rising interest rates.

Folks, it took 40 years to rise the 700 ish % .. we’ve done it in 3 and we are not done. I’m counting this as wave 5 of 1 or A. So, in the short-medium term expect interest rates to continue rising. Then of course we will get wave 2 or B and everyone will think the Fed is done tightening and that’s when the real smash will occur – a C wave or wave 3 higher? What if this is a new “bull market” in rates…? Wave 3 can’t be the smallest SO … interest rates are rising folks. Ugh.

Long Bond Futures – May 15, 2023

If your a technician, you can’t help but notice the very long (month ish) consolidation occurring in the bond market.

Today’s price action appears to want and break the support that has been around since March 15th. As you can see above, we do some ‘basic’ projections and right when the neckline breaks there is minor support (blue projection arrows) and then the BIG support w/ the blue rectangle present. A lot of math coming into that level. I believe that is the crucial level.

As you can see from the weekly chart above, the “time” of the corrections have been pretty symmetrical so from a timing perspective certainly looks like this “bounce” has run it’s course for one more leg down.

From the ATH, it’s a pretty clear count and I’m labeling this as a 4 completing/completed and another leg down (rates go UP in this case) into the .618 from the 1981 low (40+ years ago) in bond prices. Note the blue measured move above .. that was the largest correction in 40+ years. We take harmonics from that and you can see the square root of 3 harmonic nailed the low precisely. We have a .618 retrace, 1.618 extension, trend line coming from the low in 1981 and a harmonic of the largest prior correction.

That level is a good level to BUY – if we get down there.

TBT – decision time

well, underwater on TBT. I’ve shown my entry and man did that look like a NICE one .. but, it’s all probability. folks there was a TON of math coming together in /around 17-18 and it got wiped out. but, we have some support holding at the .707.

I’ll cut half my position on TBT if we lose 16.06 to the downside on a DAILY close below.

I’m still bullish RATES but … trade what you see, right? let’s give it a couple more days and then might need to throw half a towel into the ring on this one …

also, I’ve done the 30 year continuous futures contract INVERTED to show the same picture at TBT and to also see if there is some support that might be found on this one … hmmmmm. can’t win em’ all …

investing is like golf .. learn how to play out of the rough and the sand and you will be a good golfer! I’m still learning!

TBT update

last post on TBT: https://bartscharts.com/2021/06/20/tbt-3/

TBT has fallen into the bottom level of BUY zone and I’m long TBT in/around 18.

A lot going on w/ his chart but wanted to show you some “other” geometry that I was working … you see, we can make arcs and develop trend lines using the geometry of the chart but also, using the TIME and PRICE to define the vectors.

in this case, we take the all time low and draw the bottom of the square to intersect the “time” of the high. that will define our arcs and the square. the most important aspect of a square is the 45 degree angle (red line) and that line we then “copy” and “paste” to the bottom right of the first square and, well look at that … it intersects the LOW almost exactly. we also draw another square (and we can/will keep drawing these squares to find the trend lines running the show) and notice how the two 45 degree angles TIMED the low almost exactly .. (FWIW, this was a precise 1.618 AB =CD and a .618 retracement along w/ the same percentage corrective move that drove price into the all time low … came in around 21-22 percent decline.

so, while we do have the traditional “slap a retracement grid and look for the .618 retracement and a whole lot more …

take some time to study this chart .. try to understand it as it’s very helpful, indeed.

and, w/ all this work, I’ll consider it “wrong” if we get a daily close below 16.08 (.786 retracement)good weekend to everyone …

Bart

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