anyone else notice the GAP DOWN in Fed Fund Futures?

I will claim, right now, to have ZERO IDEA or INTEREST what fundamentals drive interest rate policy.  Not a clue.  However, I will claim to be able to read charts to manage risk. Am I “right” every time … well yes, because I know where I’m wrong every time (TILT) because I’m a pattern dude.

That being said, I am hawking the Fed Fund Futures contract (FF #F) and this week we had the largest gap down (interest rates higher)  since 2009.  Note, right below this channel is a “window” that has not been “closed” so perhaps we see a move out of the channel and into the window.  IF we have a WEEKLY close below the channel THEN believe we have changed trend and interest rates will be going a LOT higher.

Use your fundamentals and other technicals to derive and idea but please use these levels as key demarcation points.

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Ten Year: approaching a KEY SELL PATTERN.  Let’s do the “IF – THEN” …IF rates are continuing to rise THEN this SELL pattern will fail. THIS IS A KEY LEVEL.  Here’s the chart:

original_44851997

TLT:  here’s the beauty of PATTERNS. Correspondingly, we have a BUY PATTERN on TLT.  I’m showing 2 buy patterns.  1 in the light blue is approaching or at the buy level.  It’s roughly 120. The other (yellow) is lower and is down at 116.

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IF you want to SHORT YIELD THEN one of these levels will work and the 10 year will hold.  IF you are a LONG RATES person then the TLT levels will fail and rates should continue to rise.

One last thing … when you have a “change” in trend, the market will tell you.  I have used the RSI (long term) in the past and want to call attention to the ratio of TEN YEAR / GOLD.  Note, the last support found in this ratio was ABOVE 30 and, basically, on the BULLISH support zone. The market very well might be telling us something.

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CONCLUSION: w/out ANY fundamental back drop – trust me they are important but I’m not smart enough to learn it – the charts below show me very important SELL and BUY patterns that are inverse of each other.  One of them will fail (yield vs price) and THAT will dictate the direction of rates for the coming months … no matter what the talking head pundits on TV claim.

thanks for reading this far ….

Bart

 

 

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

media_memorex_cass_1974

great commercial w/ that dude sitting in his chair …

maxell

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:

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

main20140208200545

“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 …

is this the first sign of a breakdown or more of the same? Is it LIVE or is it MEMOREX.  WATCH closely!
is this the first sign of a breakdown or more of the same? Is it LIVE or is it MEMOREX. WATCH closely!

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

the key to the Ten Year Treasury Yield

I’ve highlighted an area w/ a blue rectangle.

Folks, that’s 5 waves up so – ultimately we need another 5 wave move up to occur.

I think that’s in work as of the close last week and have projected ten year yields to spike to 3.6-4.0 for now.

Going to be interesting to watch …

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notice the 5 wave move UP … need another 5 wave move up. Believe that’s happening right now

 

Interest rate forecast …updated

8/28/2014: the 2.358 level did not hold.  In fact, in the way I look at the market, the PATTERN caused the gap. the gap below the pattern is a big deal.  I’ve shown the projection/pattern that “caused” the low at 2.322.  right now, looks like our low back on August 15, 2014 will be attacked.

Main20140828232643I’m not trying to call for a increase in interest rates or a continued fall in interest rates.  frankly, I don’t have clue about the fundamental aspects of what the Fed is doing or not doing.  What I do know is PATTERNS and sometimes they work (which they do — alot) and sometimes they don’t.  This pattern, below, clearly failed at the level we were expecting to hold. but here is the deal …on the way up w/ interest rates it was CLEARLY 5 waves up … so this means we are CORRECTING and there is, supposed (the operative word) be ANOTHER WAVE UP ….

10 year weekly
10 year weekly

 


 

 

8/22/2014 – if you read below you’ll read “my bet is on the TEN YEAR holding this low and starting back up ….”  If that is the case then we have a VERY NICE PATTERN appearing on the Ten Year Treasury Yield that has multiple confirmations going for it ….remember folks, this is a 5 minute chart.

also, I have “copy/pasted” the earlier this week post on Jackson Hole and the fixed income structure …

the PATTERN:

  • it’s a nice corrective pattern a-b-c.  expectation is that “c” is in work and “should” take yields down to 2.358.
  • c = 1.618*a right at ….2.358.
  • a 1.618 extension of the “b” wave takes us right to ….2.358
  • a retracement from the “key” low that we have watched for a while is .618 at …. you guessed it …2.358.

when all of these numbers line up … in this case SUPPORT usually occurs.

make it a great weekend …

5 minute ten year rate PATTERN
5 minute ten year rate PATTERN

one last … I have ABSOLUTELY NO IDEA what Janet Yellen and the FED did this week or what in the world was said in the meeting minutes.  Frankly, I don’t care … PATTERNS, PATTERNS, PATTERNS.

                                                                                                                                                                                                                                                                                                                                                             

CLIFF NOTES: folks, follow this link to catch up on the Fixed Income story: http://bartscharts.com//?s=fixed+income

CLIFF NOTES 2: this is a tough one … the pattern in the fixed income market (30 year) failed and has gone much higher//the pattern on TBT failed.  HOWEVER, the long standing target on the TEN YEAR Treasury Yield was hit on Friday.  Quite frankly, I didn’t think it would get hit as the 2.4 level provide some nice support and then, ultimately failed.   So we are at THE critical level for the rate structure on the 10 year.  I’ll stand by my guns this is corrective in nature, but the Ten Year needs to stop here or we’ll vacuum lower and rates will continue to plummet.  I also updated the 30 year count to show a potential NEW HIGH if this count is correct.  I will be the first to admit that our pattern failed on the 30 year/TBT.  In fact, we found the support for the long bond ( http://bartscharts.com/2014/01/04/thelma-and-louis-and-fixed-income/ ) and it was at a very crucial level at the time of that post.  It held and since then has rocketed higher (lower rates).

CLIFF NOTES 3: we are at a CRUCIAL CRUCIAL LEVEL …. not trying to be wishy washy as we have to take a stand but I can see the case of either direction. But in order to take a stand and some risk – my bet is on the TEN YEAR holding this low and starting back up ….

CHEERS!

HI, I am fully aware the FED is leveraged beyond thunder dome !!!!
HI, I am fully aware the FED is leveraged beyond thunder dome !!!!

 

Main20140817110505 Main20140817110951 Main20140817112020 Main20140817113414 Main20140817120553 Main20140817120935 Main20140817121143

Interest rate forecast …

8/22/2014 – if you read below you’ll read “my bet is on the TEN YEAR holding this low and starting back up ….”  If that is the case then we have a VERY NICE PATTERN appearing on the Ten Year Treasury Yield that has multiple confirmations going for it ….remember folks, this is a 5 minute chart.

also, I have “copy/pasted” the earlier this week post on Jackson Hole and the fixed income structure …

the PATTERN:

  • it’s a nice corrective pattern a-b-c.  expectation is that “c” is in work and “should” take yields down to 2.358.
  • c = 1.618*a right at ….2.358.
  • a 1.618 extension of the “b” wave takes us right to ….2.358
  • a retracement from the “key” low that we have watched for a while is .618 at …. you guessed it …2.358.

when all of these numbers line up … in this case SUPPORT usually occurs.

make it a great weekend …

5 minute ten year rate PATTERN
5 minute ten year rate PATTERN

one last … I have ABSOLUTELY NO IDEA what Janet Yellen and the FED did this week or what in the world was said in the meeting minutes.  Frankly, I don’t care … PATTERNS, PATTERNS, PATTERNS.

                                                                                                                                                                                                                                                                                                                                                             

CLIFF NOTES: folks, follow this link to catch up on the Fixed Income story: http://bartscharts.com//?s=fixed+income

CLIFF NOTES 2: this is a tough one … the pattern in the fixed income market (30 year) failed and has gone much higher//the pattern on TBT failed.  HOWEVER, the long standing target on the TEN YEAR Treasury Yield was hit on Friday.  Quite frankly, I didn’t think it would get hit as the 2.4 level provide some nice support and then, ultimately failed.   So we are at THE critical level for the rate structure on the 10 year.  I’ll stand by my guns this is corrective in nature, but the Ten Year needs to stop here or we’ll vacuum lower and rates will continue to plummet.  I also updated the 30 year count to show a potential NEW HIGH if this count is correct.  I will be the first to admit that our pattern failed on the 30 year/TBT.  In fact, we found the support for the long bond ( http://bartscharts.com/2014/01/04/thelma-and-louis-and-fixed-income/ ) and it was at a very crucial level at the time of that post.  It held and since then has rocketed higher (lower rates).

CLIFF NOTES 3: we are at a CRUCIAL CRUCIAL LEVEL …. not trying to be wishy washy as we have to take a stand but I can see the case of either direction. But in order to take a stand and some risk – my bet is on the TEN YEAR holding this low and starting back up ….

CHEERS!

HI, I am fully aware the FED is leveraged beyond thunder dome !!!!
HI, I am fully aware the FED is leveraged beyond thunder dome !!!!

 

Main20140817110505 Main20140817110951 Main20140817112020 Main20140817113414 Main20140817120553 Main20140817120935 Main20140817121143

Jackson Hole … let the games begin

CLIFF NOTES: folks, follow this link to catch up on the Fixed Income story: http://bartscharts.com//?s=fixed+income

CLIFF NOTES 2: this is a tough one … the pattern in the fixed income market (30 year) failed and has gone much higher//the pattern on TBT failed.  HOWEVER, the long standing target on the TEN YEAR Treasury Yield was hit on Friday.  Quite frankly, I didn’t think it would get hit as the 2.4 level provide some nice support and then, ultimately failed.   So we are at THE critical level for the rate structure on the 10 year.  I’ll stand by my guns this is corrective in nature, but the Ten Year needs to stop here or we’ll vacuum lower and rates will continue to plummet.  I also updated the 30 year count to show a potential NEW HIGH if this count is correct.  I will be the first to admit that our pattern failed on the 30 year/TBT.  In fact, we found the support for the long bond ( http://bartscharts.com/2014/01/04/thelma-and-louis-and-fixed-income/ ) and it was at a very crucial level at the time of that post.  It held and since then has rocketed higher (lower rates).

CLIFF NOTES 3: we are at a CRUCIAL CRUCIAL LEVEL …. not trying to be wishy washy as we have to take a stand but I can see the case of either direction. But in order to take a stand and some risk – my bet is on the TEN YEAR holding this low and starting back up ….

CHEERS!

HI, I am fully aware the FED is leveraged beyond thunder dome !!!!
HI, I am fully aware the FED is leveraged beyond thunder dome !!!!

 

Main20140817110505 Main20140817110951 Main20140817112020 Main20140817113414 Main20140817120553 Main20140817120935 Main20140817121143