Tag: tnx

Interest Rates – January 14, 2025

Rates sure look like they want to tag 6% and are targeting the .382 retrace from 40 years ago.

Last Post on Interest Rates: https://bartscharts.com/2023/07/06/interest-rates-july-06-2023/

I’m going to post some charts – again – just so people realize the extent of the interest insanity that we are dealing with …

At the end of ZIRP (Zero Interest Rate Policy) we were – nominally – at a 5000 year low in interest rates:

I follow Mr. Armstrong – he’s my only follow. Here’s the link to the data: https://www.armstrongeconomics.com/markets-by-sector/interest-rates/source-for-the-history-of-interest-rates/

Now, with that in mind, we have now gone up the same amount in interest rates in 4 years compared to what it took, the last time, 20 years to do … let that sink in!

The below is interest rates since 1913 – LOG SCALE. Take note of the orange line … over 112 years interest rates have NEVER gone up this much and this time THEY DID IT IN A MERE 4 years – not 20+ like the last time.

Sure seems like they want to go to – at a minimum – the .382 below. Imagine what that will do to our multi trillion dollar debt payments and, just as importantly, emerging markets, Asia and Europe. Remember, the reserve currency is STILL the USD.

So, take a look at the chart above … if we have begun (who knows) a ‘new’ bull market in interest rates, certainly seems plausible that we will have 20%+ interest rates OR a global sovereign debt collapse and burn the entire thing down …

I’m still long TBT.

Bart

Bond Complex – September 5, 2024

Bond complex coming into a key inflection point …

Well, I fully admit my mistakes on this blog. Yes, went long around 14 on TBT and now, wondering if “this was just a correction and we go back to ZIRP. ” Sure looks like TBT is about to fall off the proverbial cliff and w/ that we’ll get a rate cut and then bonds will go higher and blah blah. Good thing our interest payment on our debt isn’t crushing still ….hmmm, about that! 🙂

anyhoo … my goal has been to get into a position at what I ‘think’ (that might be the problem) and ride the entire WAVE. As you may or may not know I am a surfer and enjoy being on the water riding, what I call, echoes of the primordial big bang thru the medium of water and a surfboard. Wow … folks, you see, the water isn’t moving … it’s the PULSE of the ENERGY flowing thru the water.

so, we are close to judgement time and it’s going to close out on my head (been there done that) or have I picked the right line (you literally maneuver the surfboard to match a line that will encompass the FORM, PROPORTION and BALANCE (sound like Elliott Wave Theory?) of that wave so you can keep making sections and ride the wave up and down and up and down. It’s zen.

we can see the H+S neck line we are about to crack thru (or we should see them) and take note of the .618 price projection is precisely causing the support (hmmm – note, don’t forget, always know where the .618 price projection is) and then we go lower into a small unfilled gap on the .618 but finish a near perfect BUY pattern @23.30. Little lower is the .786 and then, well, perhaps this was an a-b-c correction and another low to be made.

Maybe I’ll just put my stop a little below the .786.

I’m no fundamentalist – fully admit it.

It just looks like way way back at the top I said this could be the top for a few decades as it sure looked like 5 waves UP from the 1982 low on bonds. So … one of these levels will hold – and start back up – which means rate increases over time.

Who knows …

now, objectively speaking, if we look at the 10 year interest rate, it really hasn’t budged that much has it? and, if we use Mr. Measured Move we can see that it does have some higher targets.

Here’s a look at interest rates

So, either way we look at it, we are coming to a very important inflection point according to the patterns.

Which way will they go?

B

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?