Expert technical analysis of financial markets by JC Parets
by Ian Culley
From the Desk of Ian Culley @Ianculley
Bonds are flying under the radar.
While everyone focuses on the S&P 500 finding resistance at its 200-day moving average, bonds are posting their most substantial rally since the early 2020 peak.
Treasuries have represented downside risk for almost two years. We get it. Nobody’s wanted bonds!
Neither have we – until now.
Here’s why… [Read more…]
by Ian Culley
From the Desk of Ian Culley @Ianculley
The strong US dollar and higher interest rates have dominated the conversation this year.
But the direction of the US Dollar Index $DXY has changed, breaking its year-to-date trendline earlier this month.
Will interest rates follow?
Not yet! So far, the uptrend remains intact for the five-, 10-, and 30-year yields. We have to give these trends the benefit of the doubt, for now.
Despite their persistence, it seems more a matter of when not if rates do eventually roll over.
Based on information from the US bond market and developed-market European yields, it could happen sooner than you might expect.
by Ian Culley
From the Desk of Ian Culley @Ianculley
Bonds are bouncing off key levels of potential support.
For some, it’s a former low. And for others, it’s a downside extension level. Regardless, we can all rejoice that bonds have stopped falling.
That doesn’t mean we’re rushing out to buy Treasuries. Instead, it signals a constructive start to a potential bottoming process for the bond market and relief from downside volatility.
Let’s check out the charts!
by Ian Culley
From the Desk of Ian Culley @Ianculley
Don’t take your eyes off the US dollar and interest rates!
I know it’s been a long year, but we’re finally witnessing early signs of potential trend reversals. The breakdown in the dollar last week confirmed the mounting evidence suggesting the USD has reached its peak.
Now, will interest rates follow?
by Ian Culley
From the Desk of Ian Culley @Ianculley
It’s been a lonely rise for interest rates.
The stocks and commodities that tend to accompany rising yields haven’t kept pace since early spring. Rates across the curve have accelerated higher, leaving these risk assets in the dust.
But the seasons have changed – and the dust has settled.
Cyclical value sectors have found their footing in recent months. Now, they’re playing catch-up.
by Ian Culley
From the Desk of Ian Culley @Ianculley
Bonds are an absolute dumpster fire.
Everyone knows fixed income is having one of its worst years on record. And, from the looks of it, we’ll all be dragging our Christmas trees to the curb before US Treasuries stage a miraculous comeback.
Don’t get me wrong. I believe these safe haven assets will dig in and catch higher – eventually. There’s just no sign of it happening any time soon.
Instead of focusing on the disappointing performance of bonds, let’s turn our attention to its relative trends against other major asset classes – stocks and commodities. [Read more…]
by Ian Culley
From the Desk of Ian Culley @Ianculley
Bonds have stopped falling across the board!
That doesn’t mean it’s time to go all in. Tactically, it’s difficult to get behind this week’s near-term strength.
Right now, we’re looking at just a few days of bullish price action. And where do we define our risk?
We have to know where we’re right and where we’re wrong before we get involved in any investment.
Thankfully, high-yield bonds answer this all-important question.
by Ian Culley
From the Desk of Ian Culley @Ianculley
Don’t catch falling knives!
It sounds simple enough. But in reality, traders continue to lose fingers as they reach for downtrending assets.
Diving after downtrends isn’t one of my many afflictions. But I do have a theory…
Traders and investors don’t realize they’re catching a falling knife in the moment. They believe they’re bargain-hunting.
So if you’re one of the many investors out there mending fresh wounds this week, I want to make one thing clear…
Bonds are a falling knife.
