|
PureBytes Links
Trading Reference Links
|
Though I strongly prefer elliott wave analysis for the bond market, the
current wave counts are a bit iffy. Though I prefer another leg higher
here, I have some concerns that bonds could have some troubles,
especially for the early part of the week.
First of all, if you use day-only charts, we got a gravestone doji from
the candlesticks. This is typically a signal of the end of a trend of
some degree. It might just mean the end of this third wave which started
near 123-18 anyway, but it is a worriesome sign. Also, there are
momentum divergences everywhere.
Then, let's take a gander at Europe. I think March 1999 eurodm have
completed a five wave rally from May. And bunds, though they have not
done a fifth wave have a 14-day RSI at 90!!! They've gotta get nailed!
Sell rallies in bonds at the start of the week.
I am not so sure what all this means for stocks. First of all, bonds had
not really been trading against stocks during the initial leg lower and
I suspect an underlying significant factor exacerbating bond's gains
this week was the huge put/call imbalances at 124 and higher strikes.
So, lower bonds might not mean higher stocks.
In Europe, bonds have been rallying regardless of stocks, so a sell-off
there in bonds might not be a sign of a stronger stock market either.
I'd watch 1090 on the S&P cash. A move above there could allow us to run
back to 1106 again, and even to a bit higher. Long term still stinks
though for stocks.
Steve Poser
|