This Chart Has Suggested Selling Bonds Since June

JC Parets
September 9, 2016

We don't have to make things complicated guys. We don't get paid to tell stories and make up reasons for why the market is moving during the day. We are market participants. We are the 99.99% of people in the world who are just here to try and make a profit. We don't have to put together a pitch, or a sexy headline, or ask our boss for permission to do things. We just want to make a buck when the market moves. That's it.

So while all those people out there pretending to be mother goose are making up stories about the fed and inflation and all sorts of noise, we prefer to focus on price, which is literally the only thing that will ever pay anyone in this business. Today we are looking at the chart that has suggested since June that selling Treasury Bonds was the right move, and therefore interest rates would rise.

Here are 30-year Treasury Bonds going back to the early 90s. When the price of bonds gets to the bottom of the channel, it's a buy. When prices get to the top of the channel, or in this case, slightly exceeded it, we want to sell bonds. From failed moves come fast moves in the opposite direction and that's precisely what we have here:

Click on Chart to Zoom In

U.S. 30-Year Bonds

I'm not sure why some people like to complicate things. I prefer a keep it simple stupid approach. If 30s are below the upper of the two parallel trendlines defining this channel since the early 90s, we want to be net sellers of U.S. Treasury Bonds.

Members of All Star Charts have been getting this data and conclusions for months already. The trade has been working and I believe it will continue to work moving forward.

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Tags: $TLT $ZB_F $ZN_F $TBT $TNX $TYX

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