This weekend we got a fresh batch of new Monthly Candlesticks. If you’re not using these charts to help you identify primary trends, I think you’re doing yourself a disservice. I rarely push a particular strategy or process. I usually just like to present the data, give you my conclusions, and then let you decide how, or if, you want to use it.
But for this, I don’t care who you are, Monthly Charts are an invaluable tool. Even if you’re a short-term trader or swing trader, we want to put all of that work into context, recognizing the major trends that are in place. Trust me, go build your own list of the most important charts and flip through them just once at the end of each month. I challenge you to start doing that every month and then come and tell me that it’s not helpful. I dare you!
Anyway, every time I go through this exercise, there are always a few things that stand out. This time around, I’d be remiss if I didn’t point out the new All-time lows in US Interest Rates. Whether you’re looking at 10s or 30s, we saw new All-time monthly closing lows across the board.
But why is this happening? Stocks are making new highs! Why are rates still crashing?
Click on Chart to Zoom in
From an intermarket perspective, if you told me back in March that the S&P500 and Nasdaq would be where they are today, I would have bet my life that rates would be much higher.
The market is a humbling place. This is just another good example.
So what’s the answer?
Well, this might be a clue. US Regional Banks went out last month at New All-time Relative Lows as well:
With bank stocks continuing to struggle compared to other stocks, US Treasury Bonds keep making new all-time highs, across the curve. But why?
Do we ignore this and keep buying stocks? That’s been working. Bonds haven’t come off all year, yet stocks have done very well since March.
Does it not matter? Can Gold, Bonds and Stocks all keep making all-time highs together forever?
I wouldn’t say “forever”, but I will say that it’s lasted longer than I could have imagined. So why can’t this continue a little longer?
Does one of these have to give?
New all-time monthly closing highs for stocks, gold and bonds.
Which one has it right?
Which one is ready to collapse?
Are none of them going to collapse?
How does this end?