Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Final Top Of US Bond Bull Market Set For 3rd Qtr of 2016

Interest-Rates / US Bonds Jun 11, 2016 - 05:49 AM GMT

By: Austin_Galt

Interest-Rates

The 30 Year US Treasury Bond market has been trending up since 1981. This massive bull market is set to reach its conclusion next quarter if my analysis is correct.

Let's analyse the technicals of both price and yield of the 30 Year US T-Bond. We'll begin with the longer term quarterly chart of price.


30-Year US T-Bond Quarterly Chart

30-Year US T-Bond Quarterly Chart

We can see a "three strikes and you're out" top forming with the final third strike high still playing itself out. Once this third and likely final high is in place then a new long term bear market can trace out its initial steps.

We can see this quarterly candle is still trending up and price should eventually break the previous quarters high at 170 13/16. I expect next quarter will see a bearish reversal candle with a relatively long wick to the upside. That means I am looking for price to spike up into high most likely in July or August and closing out the quarter in September in the red. A doji candle is also a possibility with price closing out the quarter relatively unchanged.

The Bollinger Bands show price is back up at the upper band and I expect price to push up further into this band to set up the final high.

I have drawn a Fibonacci Fan from the 1981 low to first major high. This shows the majority of the 35 year bull market has taken place between the 61.8% and 76.4% angles with the former providing solid resistance for most of that move.

We can see all the recent tops have stopped abruptly as soon as they reach the 61.8% angle. Price is currently back at this angle and I favour price to stage a little fake out move by popping a bit above the angle before resistance reasserts control and price drops back down and eventually makes its way down to the 76.4% angle which should provide initial support.

The RSI looks set to throw up a fifth bearish divergence. A triple bearish divergence is often seen at major highs but we have here a rare quintuple bearish divergence.

The MACD indicator shows the averages have diverged signifying this move up pushing the limits. This indicator is also showing an all time high reading which is not uncommon for this indicator at the end of big bull markets.

Now let's look in a bit closer with the weekly chart.

30-Year US T-Bond Weekly Chart

30-Year US T-Bond Weekly Chart

We can see this third and final strike high is forming within itself its own "three strikes and you're out" top formation with price now on its way to set up the third and final strike high. So this really does appear to be the final stages of the bull market with the final high only weeks away.

The Bollinger Bands show price is back up at the upper band and I expect it to surge higher as it clings to this band.

I have drawn a Fibonacci fan from the January 2014 low to first strike high. This shows the second strike high was at resistance from the 38.2% angle while price seems to have found subsequent support around the 50% angle. I expect one last surge high that may fall short of reaching the 38.2% angel again. After that price should trade back down and start to bust through each angle that represents support.

The RSI should get back up into overbought territory and likely show a bearish divergence before turning back down while the MACD indicator is currently marginally bullish.

Now let's turn our attention to the yield.

30-Year US T-Bond Yield Quarterly Chart

30-Year US T-Bond Yield Quarterly Chart

The Bollinger Bands show price recently being rejected at the middle band and one last crack at the lower band looks in store.

I have drawn a Fibonacci Fan from the 1981 high to first major low. This shows price making its way through the angles. We can see the 76.4% angle provided support for price at the 1993 low. Price then drifted back down as it made its way to the final hurdle - the 88.6% angle. Price has reached this angle and has been crawling down along this angle. Price now looks set to give this angle, which now looks more like support, one final test. I expect blast off after that test holds.

The RSI looks set to show a triple bullish divergence which is often seen at major lows.

The MACD indicator is currently bearish signifying this bear market isn't over just yet.

30-Year US T-Bond Yield Weekly Chart

30-Year US T-Bond Yield Weekly Chart

The horizontal line denotes a double bottom that formed from the 2008 and 2012 lows. Double bottoms generally don't end trends and once again that has proven true here.

I am counting that double bottom as the first strike low in a "three strikes and you're out" low formation. Price is now headed to the third and final low.

The Bollinger Bands show price is back at the lower band and I expect price to push into this band over the coming weeks to set up the final low.

The RSI looks set to show a bullish divergence at the final low while the MACD indicator is bearish so lower prices are likely over the coming weeks.

I'll be looking to pinpoint the final high and once we get closer to that eventful moment I will switch focus to the intraday charts including right down to the 15 minute and 5 minute charts.

Summing up, the sand in this bond bull market hourglass is down to the last few grains. It is nearly time to turn it upside down and start a new trend. Time is ticking...

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

Email - info@thevoodooanalyst.com 

My website is www.thevoodooanalyst.com 

© 2016 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Austin Galt Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in