Ruh, Roh: Bond Reversal

Now, it gets interesting.

Bonds sold short the most in history.

Then, today’s action is reversal with moderate volume.

On the dollar side, at first glance it looks like a terrible day.

Action was down 0.53%.

The reality is, UUP came down to test an up-trend line formed as part of its own reversal last Thursday.

Both dollar and bonds are in an upside reversal; the dollar looks slightly ahead by a few days.

Real estate (IYR) has rallied (sort-of) which may only be temporary; likely on the (false) belief lower bond yields are good for higher yielding sectors.

Not true when we still have (as Van Metre puts it), the ‘insolvency event’ yet to come; everyone going bankrupt all at the same time.

Anything can happen and the above analysis could fall apart tomorrow.

On the probability side, looks like we’ve seen the extremes in the major sectors; now ready for reversal pivots.

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