Back, in the Day
It’s no secret, bonds (TLT) are at a critical juncture; primed to break significantly lower (not advice, not a recommendation).
Breakdown, is almost a ‘no-brainer’.
Almost.
For those old enough, remember back in the early 2000s, the S&P had formed a near-perfect Head & Shoulders?
Remember, how price action was printing lower, ready to penetrate the down-sloping neckline?
Then, just as it got there (week of 10/11/02), from out of nowhere, came a launch upward that didn’t stop until October of 2007?
Rember that?
Of course, we found out later, the ‘hidden hand’ was at work, preventing a melt-down; leading us to where we are today. 🙂
Let’s all keep that in mind as we watch the bond market flirt with disaster (not advice, not a recommendation).
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
The Danger Point® 
I appreciate the open minded take. I lean bullish on this in the long-term so I look at it as a double bottom. Maybe a triple bottom if you include the May 2025 low. Either way, it’s probably dead money for a while. If oil can moderate, we can get friendlier inflation prints in the fall or winter as the month over month comparisons will deflate.
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Thanks,
I watched that whole scenario in real time. If the market had been allowed to ‘do its thing’ and collapse into a measured move (from the H&S), and wash out the speculation, we literally would not be here now.
One possibility for the ‘stick-save’ could be an overall market melt-down. However, this time, it could be both bonds and stocks moving lower.
On a separate note, something not covered recently is a proprietary ‘indicator’ based on observation.
That is, market reversals (S&P), tend to happen just before, during, or just after a holiday week.
The most famous of these was the 1929 top, on a Tuesday, the day after the Labor Day Weekend.
So, here we are, the S&P appears to have a top (of some kind) a little early leading into the holiday week.
As for inflation, at some point it seems that demand destruction would kick in.
Regards,
Paul
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