Update on Bonds: Aug 7, 2019

We called the top on the 10Y on October 10, 2018 [see: Plan B] with rates at 3.24% and ZN at 117’230.

…I’ve always been inclined to believe more in the yellow channel — which says that 10Y yields have now topped and ZN has bottomed.

Since then, I’ve taken a “show me” attitude toward rates, setting a target or two at a time and updating as they were met — with the 15.54 target officially in play once TNX dropped through 21.72 a few months ago. But, the price chart has been crystal clear ever since December [see: December 26 Update on Bonds] with a critical target of 130’20 – 130’23.

From last December…

…and, this morning.

It’s always fun to nail a target so precisely many months in advance.  But, the excitement quickly fades once the pressing question sets in: what now?

 *  *  *

Meanwhile, the equity funhouse is about to reopen.  Our analog is still very much on track, supported by yesterday’s head fake and this morning’s plunge.  Many of the stocks we follow have tagged their next downside targets. It’ll be interesting to see how long they can hold up in the face of lower lows.

Isn’t it funny how, with all the market turmoil, no one’s talking about DB’s latest breakdown?

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