Public Post: The Rout in Bonds Is Probably Over: A Look at $TLT

In my last post on $TLT (here), I expected a low to be forming because of the wave balance that was present at the low that was formed in June. Ironically, and to my great embarrassment, that post marked the top of the rally, and we have since had another decline. So let’s look again.

That wave balance was so perfect, that it was strong evidence, but it was predicated on the start of the whole yellow a-b-c count having its origin at the top of the COVID crash peak (which I’ve marked with an orange box in the chart below).

tlt

Looking at it this way, with an alternative high, makes it almost impossible for me to not see the structure as now complete. It’s clearly a large 3-wave decline, and it counts internally well in the course of the yellow “c.” And, while there are great fibs within yellow “c,” there is not a relationship between yellow “a” and yellow “c” if we use the COVID spike as the origin of yellow “a” which i had tried to use before.

However, by using the August of 2020 high as the origin, there is now wave balance between the yellow “a” and “c” waves, and that all coincides with balance between the pink waves that make up yellow “c,” too. And so this is a terrific spot for bonds to have finally bottomed.


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Let’s Revisit $TLT

My last post on $TLT was here. In that post, I was looking for a reaction (and perhaps a long-term low) at the equal legs fib for cycle (yellow) c (of purple b). And fortunately, we did get that (at least so far). Touching that fib has produced the largest rally in this instrument since May 2021.

Now, if it was a near-permanent low, I would prefer to see an impulse wave off of that low (and it doesn’t look like one so far), but it’s not a hard requirement because the long-term upward-sloping count also seems to me to be a corrective pattern. From here, given the importance of that fib, and the divergence that occurred at the low on the daily RSI, I would expect that low to hold at least for a while more (weeks and perhaps months).

One potential target is the 250-day EMA (projected by the green line), the slope of which should begin to flatten as bonds move up more. So, I would to like to see it get to there before trying to reassess things at that point.

TLT


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


The Suspense Is Killing Me

Zoomed way in to the 1-minute, we can see an initial reaction to that fib pointed out earlier. Let’s see if that means anything. I’m counting on you, Algos. Don’t let me down.

TLT


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


$TLT Update: Are We Finally Getting Close?

My last major update on $TLT was here. In that post, I had identified a fib level and recognized that we had reached my target from here. In the meantime, it’s just kept vomiting.

However, I am changing what I had viewed as a triangle B-wave (yellow degree) to a simpler 3-wave move, and from that, we have a clear 5-waves down. If that is correct, we are virtually at yellow “c” = yellow “a” now.

TLT

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


I See A Couple of Options

I continue to believe that there is a low probability of a long, drawn-out bear market. That does not mean that we cannot have a technical bear market, of course. But I do not think we have some multi-year demon ahead of us. I remain more inclined to believe that we are closer to a bottom in time, if not yet in price.

I know a lot of people are expecting a GFC-style crash, but I don’t see a systemic risk large enough for something of that magnitude. I do believe we are in a correction in a longer-term bull market that is incomplete. But, it is possible for us to still see lower prices in the short-term.


The options I will list below are based off of a conviction I have that sentiment here is more compatible with us being near a significant low, rather than in the middle of a move, or certainly near any kind of top. People are certainly allowed to get very bearish. But they need to become so after most of it’s already done. People are very bearish here, and so I think that most of it’s already done (or it already is done).


If Friday Was a Panic Low

It is statistically rare to sell into a close and then gap down the next day. Gap downs are more commonly found after there are short covering rallies (if even only small ones) into a close. Friday was quite a statistically rare day. That said, the bullish count is not invalid, though it looks like hell because a nice intraday reversal would have looked a lot better after a drop like that—especially given the well-defined wedge that had developed. But, “abandoned babies” and “island reversalsare chart patterns that do happen. And so, if it’s a deep “2,” we may rally strongly from here and never look back. That is a possibility here.

SPY

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


I Ain’t Skeered: Weekend Recap of the Markets

My basic views remain unchanged. That said, until we see a big rally, we have yet to see a big rally. I would have been pleased to see big, fat reversal candles across the board, showing some real institutional support in the markets, but they have no big appetite yet. If they are active in the markets here, they are active only very secretly, buying only to the extent that exactly offsets the supply, keeping prices in a weekly doji candle. If they are here, they are absorbing the selling and not a penny more.

Given the monstrously bearish sentiment I believe has washed over the public, I would like to believe that retail is liquidating here, but until we get a bid, there’s no way for me to know.

In this article, I will simply walk through a lot of charts and other data. Most of them can be interpreted to suit your own expectations here, whether bearish or bullish. That’s how the bastards left us hanging this week, lol. But, I hope the presentation of information is of some help to you.


Local Structure

I didn’t like having to point this out today—the possibility of a triangle—because I remain fairly well convicted about my bullish call, and yet, it does present a threat, and I would feel terrible if I didn’t at least point it out and we puked.

Now, this range we’ve been in this week could absolutely just be a Wyckoff accumulation. If it is, it is harmless:

ES

Read more “I Ain’t Skeered: Weekend Recap of the Markets”


Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


A Few Observations on Junk Bonds

I want to make a few observations on $JNK. I like to watch it (and other high-yield debt instruments) for signals. Now, when we simply look at the chart, it’s in a total free fall, a total bloodbath:

JNK

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Several Small Data Points

Just a few observations I would like to pass along.

Check the dates, maybe it’s that easy, something to do with institutional buy and sell scheduling, unsure:

SPY

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


An Important Update on $TLT

Previously, I suggested that $TLT would fall to circa $126 and we’re there now and we should see how things stand.

First, in a basic sense, let’s examine the structure. From the COVID crash, I believe we have (at least so far) proceeded in a huge, 3-wave decline. That’s the cycle (yellow) a-b-c. My target in that linked post above came from two features of this chart: the long-term trend line below and the nearest fib relationship to that channel:

TLT

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.


Let’s Look at a Bunch of Things

As most of you already know, I expected a bounce, and so far, we’re getting just that. Then today, I expressed openness toward the idea that instead of only reaching the 3/3 high (which could eventually produce a “flat topped triangle”), we could also go higher to form “parallel rails.” One reason for that is the distance I think Apple may need to travel: were it to reach its bull wedge structure, the S&P 500 would need more space, too.

But the structure today has me even questioning the parallel rails thought now. And the reason is: the S&P 500 is moving more that Apple is. And if Apple needs to get to the bullish wedge, the S&P is probably not going to be confined by even parallel rails here.

So, let’s examine some things. The parallel rail look (fake bull wedge breakout look) looks like this, below. The problem for this is that intermediate (orange) “C” should be a 5-wave move, and while that would have been okay before the FOMC drop, it’s not so great now. To be frank, this looks more like a 1-2.

ES

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Note: When articles are first published, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced (or to join my Discord chatroom), please consider becoming a patron. Note that there is a 7-day free trial period. More information may be found on my About page and on my Patreon page.