Molly Hatchet and the Bond Complex – flirting with disaster? Update 04/01/2018

04/01/2018 – update

note, the prices bounced nicely off the long term Pitchfork (extended 1.27) and w/ the RSI buried deeply, this ‘bounce’ might surprise some as we work off an extreme oversold (monthly) condition since 1985. I still hold out that we have a MAJOR top in the Bond Complex and this is an opportunity to go long rates (short bonds) in the coming weeks.

this ‘trend line’ is the line in the sand w/ regard to bonds and the rate complex.

Bart

 

02/10/2018 – update.

note: a potential H+S MONTHLY top for the long bond along w/ a crucial adams pitchfork trendline make the area we are at RIGHT NOW crucial for the bond complex moving forward.

is Molly Hatchet – Flirting With Disaster – on the horizon?

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here’s the daily chart updated showing target area was hit …

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06/20/2017 – tracking SLOWLY up to the desire short zone.  IF (the big IF) we are correct here the next move down is going to be very very strong.  Hold onto your hats.   A hint that the ‘thesis’ is wrong is if we blow thru the highlighted area.  We shouldn’t …

Bart

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1/21/2017 – would really like this to start back up again into the areas highlighted.  could be the trade of the year …

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sent to this to Andy and the gang over the weekend …let me know if you have any questions.

Bart

https://www.seeitmarket.com/tlt-update-long-duration-treasury-bonds-deeply-oversold-16360/

update on TLT and Bonds over @seeitmarket updated

1/21/2017 – would really like this to start back up again into the areas highlighted.  could be the trade of the year …

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sent to this to Andy and the gang over the weekend …let me know if you have any questions.

Bart

 

TLT Update: Long Duration Treasury Bonds Deeply Oversold

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 …

Main20150209212912
notice the 5 wave move UP … need another 5 wave move up. Believe that’s happening right now

 

Fixed Income …at the inflection point

CLIFF NOTES: target hit on the long bond, last target hit on TBT, RYJUX hitting some key support.  No doubt the move up from the neckline and multi month consolidation is a big deal and now we’ll see if the neckline is attacked as we are suggesting. Note, it already came down and bounced off the neckline for a very nice LONG Bond opportunity.  W/ this many patterns completing there is, of course 1 of 2 things that are going to occur … THEY WORK or DO NOT WORK.

CLIFF NOTES 2: we showed this chart before but note the FRACTAL that was present in the LONG BOND is EXACTLY the same as 10/1987. Not making any crazy crash forecasts just bringing it up that the PATTERN was EXACT.

Watch these levels very very closely ….

Main20140516085418 Main20140516085803 Main20140516085846 Main20140516090616 Main20140516090900 Main20140516091113

gameplan for the long bond structure …

CLIFF NOTES: if you look at the chart below, you will see an inverse head and shoulders pattern that had it’s genesis almost a year go – 07/2013.  Just recently (the past 3 trading days) we have broken from this neckline ….price on the bonds should start up.  Here’s the gameplan — expect the 137 28 level to hold as resistance.  (It’s a butterfly sell pattern) and then price should come down to the neckline and here is where we really see the battle between the bulls and bears.  All things being equal, the standard gameplan is to trade the return to the neckline and therefore go LONG in/around the 134-135 level.  However, if the rates are really going to rise, then this neckline will be defeated and  we’ll go thru the black line to the downside.  This is the gameplan …

 

Main20140505205044

Fixed Income Pattern and October 1987

there are some very interesting things to point out regarding fixed income tonight …

in the chart below note the following:

  • a swing low has never been broken in this bull market run that started 33 years ago.  they are shown by the dashed green lines
  • we think a MAJOR top is at hand in the 153 area // this bounce is expected.
  • the blue triangle represents the same corrective move that we just completed in both PRICE and TIME.  NOTE — this same correction happened before in October 1987.  Also note, there was no panic crash in the bonds.  I’m not implying the market will crash – I’m saying the exact same PATTERN appeared and we have completed the exact same PATTERN.
  • the largest corrective move in fixed income occurred during the 2008-2009 panic.  the magnitude of that correction takes us to 123-124 if we do it again.
  • SUMMARY: still believe a major top is at hand//breaking a swing low will confirm//bounce occurring now is expected
30 year bond continuous contract
30 year bond continuous contract

next chart is the 10 year treasury yield monthly chart from 1995-2014. Data is not as good as the long bond, but we also have some very interesting developments.

10 year yield
10 year yield
  • note the UP orange arrow w/ the DOWN red arrow and how these arrows are overlaid by a blue triangle.  the 5 wave sequence UP from the low at 1.4 is equal to the orange arrow UP so the PATTERN is the same so a correction down to the red arrow level would be an opportune time to BUY rates.
  • the blue arrows show the largest move up by the interest rate structure shown …to complete that same move again will take rates to 4.14% and out of the channel which is defined by resistance in/around 3-3.5%.
  • SUMMARY: believe a major low was made, we have just finished wave 1 of 5 and currently working thru a 3 wave corrective sequence.  Would be looking to BUY after the corrective pattern is complete.

next chart is the Montly 30 day Federal Funds Futures … basically, this is what traders think w/ regard short term interest rates and the Fed’s policy from month/month.

30 day fed fund futures
30 day fed fund futures
  • NOTE: rates found resistance right at the .786 retracement.  Again, the rates stopped going UP and found resistance at .786 retracement.  did the fundamentals have anything to do w/ it or not?
  • IF we continue the projection it goes above 100. That’s negative interest rates.  Don’t think that will happen … (?) 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.

make it a great weekend and watch the levels on the long bond AND the fact that the same PATTERN in PRICE and TIME has occurred, just like coming into a low in October of 1987.

Thelma and Louis and Fixed Income

Interest Rates are approaching the CLIFF

Thelma and Louis made this choice ...
Thelma and Louis made this choice …

here’s a post that can allow you to catch up the saga w/in the fixed income market … whats funny is we have been SPOT ON w/ the dollar, commodities and fixed income.  the equities have just kept going UP UP UP.  Note, the BULLISH optimism in the equity market is HIGHER than 1987.  The thump is coming to the equity ecosystem.  The PATTERNS are showing it …back to fixed income –

http://bartscharts.com/2013/11/10/fixed-income-the-one-more-high-or-final-high-in-place-quick-looks/

going back 1.5 years here was one of the charts from fixed income market AT THE TOP:

long bond at the top
long bond at the top

here is the updated chart and, note, the cliff that the LONG BOND is sitting on …

Long Bond updated 1/4/2014
Long Bond updated 1/4/2014

we are sitting right on the cliff that has held rates at bay … I’ve used the “Pitchfork” method to help define the trend line using the “major” impulse low that started this run in 1981.  the red line is a simple 1.27 expansion of the construction of the Pitchfork.  It CREATED the trend line … remember 1.27 is the square root of 1.618.  Also, note the blue arrow is the LARGEST measured move correction since the 1981 origin.  IF/WHEN we lose this CLIFF prices should fall to the level shown …

below is a DAILY chart showing a POSSIBLE count.  Note, looks like we are finishing up a 3rd w/ perhaps that break into the target shown.  Here’s what we need to really pay attention to … in the past, when this trend line was hit PRICE exploded.  We are, at a minimum, respecting this support but price action doesn’t appear to be very bullish in/around here.  Just take note … again, a break here will target the 123 level.

long bond daily count
long bond daily count

 

2014 is going to be one heck of a fun journey …

rock on, ok?

BART

 

 

fixed income … the one more high or final high in place quick looks

take the time to catch up on  by reading/viewing charts from the below links…

last post:

http://bartscharts.com/2013/11/05/fixed-income-time-is-right-but-what-about-the-price-and-the-underlying-trend/

post that warned of a very important top – before I was blogging:

http://allstarcharts.com/are-interest-rates-at-a-key-inflection-point/

bonds sold off hard on Friday and what could be the start of another leg down.

let me digress for a bit .. I LOVE Elliot Wave – when it’s easy to count.  LOL – no kidding if you can pay attention to corrections and their form (flats, zig zags, triangles, expanded flats, double threes, etc) and live by the rules (3 can’t be shortest, 2 can’t go above/below the beginning of 1, 4 can’t go past the end of 1) you can get kind of dangerous at it.  when I try to force a count it’s probably correcting or “the grid is shifting” and the count will, ultimately come to me.  so, am I on a 5 minute chart counting every squiggle?  nope … however, I do look for counts on monthly and weekly charts.

back to fixed income … if we look at the low in the summer of 2009 we’ll see the next leg up on bonds (the last?) start in earnest.  Wave 1 peaks out and, as you can see, I have labeled to areas where 1 might have finished.  then we go down into 2 and then this is where it gets interesting … if we make (1) = 3 then the correction BLOWS THRU 1 and we have broke our rule so we have to sub-divide and then NICELY count (1), (2), (3), (4),(5) into the all time high and that high becomes 3.  for me, it’s the only way that I can count it and NOT break rules.

w/ that in mind, we see a 3 wave move down (a) and then a 3 wave movement up (b) and now we are rolling in a pretty devastating C wave…the “internals” of this C wave are very nice in that 3 was exactly 1.618 of 1 and IF 5=1 we land right on the top of the wave 1 that began the move in 2009 and it also equals the MAX/EXTREME corrective move that has ever occurred in this 30+ year move…IF that level holds and we start going up then, we might be up to another high.  Sounds crazy but that is what the chart is telling us w/ regard to “one more high”

the chart:

November 10 2013 LONG BOND MONTHLYNovember 10 2013 Long Bond Weeklyhere is the bearish count – note the entire 2 was a flat type of correction and therefore, you “could” fit this one into the picture….either way, we are on the right side of the market and I feel pretty certain that we’ll target that long standing trend line at 127-128 (red line) and/or the 124 level.  I expect rates to rise accordingly as this target area is attacked.  Stay tuned …

Long Bond w/ a modified count to show the all time high
Long Bond w/ a modified count to show the all time high

Fixed Income – TIME is right but what about the price and the underlying trend?

to catch up on prior fixed income posts:

http://bartscharts.com/2013/10/30/its-fed-time-and-an-explanation-of-the-recent-price-action-in-fixed-income/

http://bartscharts.com/2013/10/21/plotting-the-next-move-in-fixed-income/

November 5 2013 30 year bond

keep an eye on fixed income.  the two triangles shown at the bottom of the chart represent the PRICE and TIME extremes that have occurred w/in the context of the top in Bonds last year.  Note, the current rally has not exceeded either one in PRICE but we are definitely in the time window of a move down to start.  IMHO it’s too soon to call a BEAR market in fixed income as we have just completed a “normal” measured move correction w/ in the context of a 30 year bull run.  HOWEVER, we will see early signs appear to give a heads up …right now, w/ this time component being present it will be very informative to watch price action as continued strength above the blue horizontal lines during this TIME frame will cause prices to surge UP thereby suppressing YIELD once again.

TBT another move higher?
TBT another move higher?