x
0

30-Year Bonds On The Move

By Candy MathesonBondsMay 19, 2017 06:30AM ET
www.investing.com/analysis/30-year-bonds-on-the-move-200190140
30-Year Bonds On The Move
By Candy Matheson   |  May 19, 2017 06:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Further to my post of April 11, 30-Year Bonds have gained a couple of points, as shown on the monthly chart below.

Price now sits just above major resistance (50% Fibonacci retracement) and is poised to begin reversing the steep plunge that began in mid-2016.

30-Year Bonds Monthly Chart
30-Year Bonds Monthly Chart

Furthermore, price has now broken above the 50-day moving average of the USB:SPX ratio and is currently at the major resistance level of 0.65, as shown on the daily ratio chart below.

Inasmuch as we're close to seeing a new "BUY" signal form on all 3 technical indicators, I'd keep an eye on this ratio to determine its strength versus equities in the coming days/weeks (particularly, in light of my comments of May 18), especially, if it breaks and holds above 0.65. If it does, its next target would be the 200-day moving average at 0.70.

USB-SPX Daily Chart
USB-SPX Daily Chart

As an aside, I'd add that, in the midst of the current political chaos emanating from the White House, President Trump may end up remaining in power for 4 years. However, if in the meantime, he's widely regarded by domestic and foreign political players, as well as the American public, as untrustworthy (in spite of future facts and conclusions reached on current political and intelligence investigations), his tenure could very well end up being unremarkable and devoid of any major accomplishment.

In that kind of environment, this would NOT be a wagon that equity markets could confidently hook up to in a sustainable way, without the risk of accompanying high volatility, in my opinion.

In this regard, watch for a break and hold below the 150 major support level on the SPX:VIX ratio, as well as a drop and hold below zero on the Momentum indicator, as shown on the monthly ratio chart below.

In that case, volatility will remain elevated and we'll see larger intraday and overnight equity swings.

SPX-VIX Monthly Chart
SPX-VIX Monthly Chart

30-Year Bonds On The Move
 
30-Year Bonds On The Move

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Who Dat
Who Dat May 19, 2017 10:36PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Candy, do yourself a favor and spare us your amateur politics. The Trump rally hasn't given up even a 3% drawdown in over five months. The stock market evidently likes Trump just fine.
Candy Matheson
Candy Matheson May 20, 2017 5:03PM GMT
Author's response
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thank you for your opinions. You may free yourself from such "burdens" by choosing not to read mine.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
 
 
 
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.