This is the video recording of our December 5th Monthly Charts Live Strategy Session

It's the weekly bond market edition of What the FICC?

Today we're tracking European yields for insight into the next big move in US interest rates.

Check it out!

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.

Let’s break it down.

First, we can’t dismiss the middle-long end of the curve holding above year-to-date trendlines.

Our outlook remains higher for these yields as long as their trend lines hold. If they...

Happy Thanksgiving, everyone!

There's so much to be thankful for. And as investors and traders, we can all rejoice that bonds have stopped falling!

Here's our weekly bond edition of What the FICC?!?!

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!

First up is the long-duration Zero Coupon ETF $ZROZ:

ZROZ has rebounded above its former 2014 lows, posting a potential failed breakdown. Risks are to the upside above 82 with potential resistance at the shelf of former lows around 100.

It’s a similar story for the Treasury Bond ETF $TLT:

T-bonds reclaimed their former 2014 lows on Wednesday. As long as TLT holds above 101.50, our tactical...

From the desk of Steve Strazza @Sstrazza

Monday night we held our November Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each

Let’s get right into it!

This is the video recording of the November 2022 Mid-month Conference Call.

We discussed:

• The most Bullish Time of the Year
• The most Bullish Time of the 4-year Presidential Cycle
• US Dollar vs Stocks Negative Correlation Continues
• Mexican Peso & VIX Relationship
• Euro & British Pound at Key Resistance Levels
• Stocks rallying with stronger GBP
• Fewer stocks making new lows, but waiting for expansion in new highs
• Sentiment for risk assets remains pessimistic
• What Year 3 in Bull Markets Looks Like
• Risk Management Charts: NYSE Comp & Value Line Index
• Relative Strength in SMIDs
• Energy - Still Waiting For A Breakout
• List of Strongest Energy Stocks to Buy
• What the end of the Energy run looks like - Crude Oil Key Levels
• Healthcare Stocks Continue to Lead - Which Ones to Own Now
• Insurance Stocks Lead Financials Higher - List of Buys
• Broker Dealers showing Relative Strength
• Most Important Chart on Earth: XLF & ITB
• CAT & DE are not defensive trades
...

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?

Check out the dual pane chart of the US dollar index $DXY and the 30-year yield $TYX:

They look almost identical. The recent breakdown in the dollar marks the lone flaw between the two, raising the question…

Will the strong relationship between rates and the dollar hold?

I won’t pretend to know where rates are headed. But if the dollar and rates remain on similar paths, my money is on declining yields at the longer end of the curve.

A falling 30-year yield also makes sense based on a...

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.

One of the strongest market themes in recent weeks has been the reemergence of value over growth.

Check out the overlay chart of the 10-year US Treasury yield $TNX and small-cap value $IWN versus small-cap growth $IWO:

The 63-day correlation study in the lower pane highlights the strong relationship between these two charts. 

At a glance, they appear quite similar. But their positive correlation began to erode in late March, reaching negative territory by...

This is the video recording of our November 7th Monthly Charts Live Strategy Session