Category Archives: TLT

Bonds In Trouble … Rates Higher?

August 17, 2024 By in Bonds, David Weis, Federal Reserve, Interest Rates, TLT, Uneducated Economist, Wyckoff

The Water’s Fine, Come On In

The financial press and their lackeys, expects the Fed to pull a rabbit out of a hat and lower rates.

The public’s perception seems to be:

‘Happy days are here again’, if rates get lowered, I’ll spend and spend. I can’t help myself, there is no end. So, get rates lowered, again.

Wyckoff warned about the financial press over a century ago. Since then, not much has changed.

In fact, it’s probably worse.

The public thinks rates are coming down. It’s the ‘credible threat’ as Uneducated Economist puts it. The Fed ‘threatens’ to lower rates, and it ‘happens’, sort of.

Actually, rates aren’t lower, but the market has distorted itself, as if they were.

So, let’s get past the narratives and go straight to the truth, price action in the bond market.

Long Bonds, TLT, Weekly Close

As my mentor Daivd Weis used to say: “What do you see?”

I’ve already marked-up the chart and I see one Wyckoff Up-Thrust, reversal, after another (not advice, not a recommendation).

That, along with exhaustion spikes in Force Index, at or near significant reversals.

The ‘Scary’ Part

Wyckoff analysis is not only price action, it’s volume as well.

Look at the volume in TLT, over the past year.

Massive inflow and what has price done? It’s gone essentially nowhere.

Wyckoff called this ‘Effort vs. Reward’. Lots of effort with little (net) reward.

Add to that, a potential exhaustion spike in Force Index (far right side, purple circle).

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Bonds, Oil & The Squeeze

August 13, 2024 By in Bonds, DRIP, DRIP-24-01, Oil, Oil & Gas, TLT, USO, Wyckoff, XOP, ZeroHedge

Bond Market Model?

According to this just out from our financial press, hedge fund managers have reduced holdings of Brent crude futures to ‘lowest levels on record’.

That condition supposes some kind of bullish bias and potential upside reversal.

Never mind the chart only goes back to 2011.

So, it’s really ‘the lowest in thirteen years’.

That’s hardly the hundred years or so, one would infer without digging deeper.

The Bond Model

Let’s not forget, bonds had a similar ‘maximum short‘ condition back in 2020.

Back then (like now), the ‘max-short’ was supposed to result in some kind of history making squeeze.

The result? It never happened.

Instead, bonds collapsed, rates launched higher and here we are today.

With that, let’s look at oil proxy, USO.

U.S. Oil Fund, USO, Daily

As of today’s action, it’s not looking too good for the bulls (not advice, not a recommendation).

It’s somewhat self-explanatory.

Price action is in Wyckoff ‘up-thrust’ position and with today’s reversal, appears to be confirming (not advice, not a recommendation).

As the earlier post stated, I’m already short the sector, DRIP-24-01, with a definitive stop defined as yesterday’s XOP high (not advice, not a recommendation).

If the ‘max short’ for oil really is the pre-cursor to an upward squeeze, we may be about to find out very soon.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Breakaway Gap … Biotech

August 7, 2024 By in $SPSIBI, Biotech, Bonds, Interest Rates, LABD, LABD-24-16, SPBIO, TLT, XBI 2 Comments

‘Today Was The Day … ‘

If there was a day to attempt a close of the (August 2nd) gap in biotech (XBI), today was that day.

With the higher open, supposedly from an interest rate policy reversal in Japan, link here and here, there appeared to be plenty of upside momentum for higher prices.

It didn’t happen

Instead, XBI posted a new daily low, painting that gap as a downside breakaway (not advice, not a recommendation).

As noted in other updates, failed moves are the most telling, getting focused attention from ‘The Street’.

Biotech XBI, Daily

The breakaway is noted.

In addition, trendlines have been updated.

The market could somehow recover and close the gap.

However, with the poor bond auction, pointing to no rate cut or even a rate increase, probabilities suggest more downside for XBI (not advice, not a recommendation).

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Correction … or … Crash?

August 2, 2024 By in 1987, Artificial Intelligence, Biotech, Bonds, Corn, Federal Reserve, Gold & Silver, Natural Gas, TLT 1 Comment

1987, Deja Vu

Insane, delusional valuations, high interest rates, no rate cut.

What could go wrong?

Visitors to this site already knew that ‘something’s up’.

Fully documented well in advance of today, was the A.I. bubble reversal, silver reversal, biotech reversal, and commodities like corn and Nat-Gas continuing their sustained decline.

Now the market hysteria is resulting in the typical knee-jerk, ‘flight to safety’ to the bond market (not advice, not a recommendation).

Surely, with all of that, the Fed will cut rates, right?

For the (potential) answer to that question, let’s look at the bond market.

Long Bonds, TLT, Weekly

Already proposed on this site, the Fed does not lead the bond market and interest rates, it follows it (not advice, not a recommendation).

So, what’s this chart telling us?

If the market continues its decline in the coming weeks, TLT price action itself shows a potential for higher bond prices (lower yields).

We’re just over six-weeks away from the next Fed meeting.

Fed Follower?

If the Fed is still a follower, not a leader and if bond (TLT) prices reach the target just as the September meeting is held, then, one would expect a rate cut (not advice, not a recommendation).

Important to note, if TLT gets to the target area, it’s in Wyckoff Up-Thrust (potential reversal) position.

Economic Air-Pocket

If there is a rate cut as a result of the leading action of the bond market and then it reverses to the downside (rates higher), that’s when it would get real interesting.

Correction or crash; we may have to wait until September to find out (not advice, not a recommendation).

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Bonds: Break Up, or Break Down?

July 5, 2024 By in Bonds, Federal Reserve, Interest Rates, TLT

Into The Wedge

Bonds are in a ‘terminating wedge’.

So, what comes first? The market implodes with bonds (likely) moving higher?

Or … bonds break lower, icing on the cake for rate-hikes, then move higher as the market tanks … Or, behind door Number Three, they both melt down, together.

The least likely event is that nothing happens (not advice, not a recommendation).

Moving on to the chart.

Bonds TLT, Monthly

As shown, the 40-year bond bull market ended during March of 2020.

That was the week of Friday 13th … you can’t make this stuff up (it’s all about the numbers).

One item above, favoring the downside more than up, the last major thrust was ‘downside pressure’.

That thrust has not yet been confirmed with more downside or negated with an upside breakout.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Gold Miners … Trap Set?

March 13, 2024 By in $SPSIBI, Biotech, Bonds, GDX, GDXJ, Gold & Silver, Gold Miners, IWM, Life Insurance, MET, NVDA, SOXX, SPBIO, TLT, Wyckoff, XBI 4 Comments

Is The Fear Exhausted?

It’s a confusing time.

Semiconductors with chief cook and bottle washer Nvidia, seem to be reversing. Other sectors like biotech and mid-caps were never part of the mania.

Add to that, biotech and life insurance may be correlated (more on that, in another update).

As the market looks to pivot lower, bonds are also pivoting lower or at least under pressure.

In response, one can say there’s been sort of a panic into the mining sector GDX, GDXJ; like it’s somehow more safe there.

Let’s see if the miners really are the safe-space.

Junior Miners GDXJ, Daily

As the chart shows (as of 12:35 p.m., EST), we’re pushing into known resistance (blue line) at the 37.00, area.

There’s also a Fibonacci time frame. Today is ‘Day 55’, from the December 22nd high.

Not only are we at Day 55 from the 12/22/23 high, but we’re also at Day 21, from the February 13th, lows.

Essentially, GDXJ is about to post a Wyckoff up-thrust condition, the area for potential downside reversal.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

The Fed’s Next Move … Rates Up

February 19, 2024 By in Bonds, Federal Reserve, Interest Rates, NVDA, TLT, Uneducated Economist, ZeroHedge

What A Surprise!

The Fed’s next move may be to raise rates, not lower them.

For those following this site, there’s no surprise. Over a year ago, we had this:

“Like ‘bread and circuses’, the ‘pivot’ discussion is a distraction … “

Incorporating the potential of rates higher into one’s analysis, ‘internalizing’ it as Uneducated Economist says, positions one completely out of the herd, able to view events objectively.

All of which brings us to the bond market, specifically long bonds TLT.

Long Bonds ETF, TLT Daily Close

Updates from this site are noted.

Until price action shows otherwise, rates are likely to head higher, not lower (bond prices down).

Therefore, using that strategic premise, the upside breakout (above resistance) in bonds had a higher probability of downside reversal than upside continuation.

No. 1 : The Usual Suspects

In the update with the above name, link here, scroll down to bullet item No. 10 for analysis.

The potential for a false breakout was correctly identified,

No. 2: Bond Reversal ? … Ruh, Roh

First, there’s potential, then, the actual.

The next update, link here, presented among other things, the odd occurrence of both bond and overall markets moving down simultaneously.

The inference being, the 40-year bond bull market is over and higher rates are more likely (not advice, not a recommendation).

Then, The Fed and Nvidia

The next few days may be quite interesting.

Nvidia (NVDA) earnings are due after hours on Wednesday and the Fed minutes are scheduled for release earlier (2:00 p.m., EST) the same day.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

D.R. Horton ‘Rolls Over’

February 17, 2024 By in DHI, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, Interest Rates, NVDA, QQQ, Real Estate, SLV, SOXX, SPY, TLT, ZeroHedge

When Real Estate Goes …

It’s been said, ‘when real estate goes, everything goes’.

Like a slow-motion train wreck, since late January, this site’s been watching the (potential) topping activity of D.R. Horton, DHI.

Now, DHI is reversing; coincident with the housing starts collapse, link here.

D.R. Horton, DHI Weekly Close

We’re right at the top of the ‘terminating wedge’.

Downside penetration and test will provide confirmation of the reversal (not advice, not a recommendation).

The major market indices appear to be topping out as well.

The SOXX, may have reversed. Trading was ‘outside-down’ during yesterday’s session.

The SPY, and QQQ, also posted outside-down.

The potential Nvidia, NVDA reversal (link here) shows that so far, that high has not been exceeded.

Rates Up, Not Down

Adding gasoline to the fire, part of this site’s strategy is rates are going higher, not lower (not advice, not a recommendation).

So far, we see that’s true with long bonds (TLT) reversing to the downside, yet again.

And Then … Gold

Let’s not leave out the latest bullish report on gold (and silver), link here.

Notice the bias … that silver’s cheap relative to gold.

How about the massive, multi-year, ‘non-confirmation‘ between gold and the other monetary metals.

If it was real 1980s style inflation, everything would be moving up in tandem … which it is not; something else is going on.

Is the mining sector, GDX, GDXJ, anticipating a price decline in gold?

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Interest Rate Shakedown

January 16, 2024 By in Bonds, Federal Reserve, Interest Rates, TLT, ZeroHedge 2 Comments

The ‘Uh Oh’ Moment

Now it begins, sowing the seeds of doubt.

‘First rate cut may be later than expected.’

How about be prepared for no rate cuts this year and more likely, continued elevated rates or higher rates (not advice, not a recommendation).

Let’s not forget we’re over a year now from the release of this post, postulating there would be no ‘Fed pivot’.

So far, no pivot and no cut.

Now that nearly everyone’s positioned on the ‘rate cut’ side, it’s time for the shakedown, possibly beginning today.

Long Bonds TLT, Daily

Just over two-weeks ago, this post noted to be on the watch for a failed breakout.

Looking at the result, we’re now below the prior breakout resistance, a bearish sign.

The chart of bonds itself is telling us (unless it’s reversed to the upside), there’s an increased chance rates are more likely to move higher (not advice, not a recommendation).

Note the ‘persistence’ to the downside of the MACD indicator. This tends to happen when sustained pressure is being applied … selling pressure in this case.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Bond Reversal ? … Ruh, Roh

January 3, 2024 By in Bonds, Federal Reserve, TBT, TLT, Uneducated Economist, Wyckoff 3 Comments

This Time’s Not Like Last Time

The market’s down; bonds down at the same time.

Wait, what?

If the Fed does not lower rates, then bonds risk a reversal to the downside (not advice, not a recommendation).

Of course, no one expects that to happen. No one.

Well, maybe there’s at least one, link here: 

‘No pivot anywhere in sight.’

Bad News, Bonds

It gets worse when looking at TLT. As we’ll see below, the chart has a (potential) repeating set-up, link here.

Long Bond Proxy TLT, Daily

The set-up is not complete and may well diffuse into nothing.

However, if it does not and we get back below the magenta resistance line, there’s likely to be some serious confusion in the markets.

Wyckoff said a century ago, those incorrectly positioned in the market, provide the fuel (as they panic and exit) for a directional move.

Just think about who’s (potentially) on the wrong side and what side that is, i.e., the bullish side.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279