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Here is an interesting monthly chart on the bonds which shows that the .786
retracement level from the 1998 high has been touched four times this year
(or approximately with highs of 106-30, 107-02, 107-07, 107-11) so that area
is clearly and inflection point it would appear.
If for some reason prices did get through that area, how many trading
systems would go into "short squeeze mode" (going outside 2 sigma) causing a
spike similar to what was seen in 1998 (six handles in a month)? Just a
thought.
Someone else on this list was calling for signifiicantly higher bond prices
a while back. Can that person comment on why and how they came up with the
116 projection (as I recall)?
don ewers
----- Original Message -----
From: "Don Ewers" <dbewers@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Sunday, October 21, 2001 11:01 AM
Subject: Re: [RT] bonds top?
> I am told the parallel or inverse relationship of stocks and bonds depends
> on where you are in the "perceived" / real economic cycle. Rising bonds
> (fiscal stimulus with lower interest rates) in a weak economy is generally
> good for stocks and yet late in the cycle as inflation concerns pop up, we
> see the inverse relationship. The attached weekly charts are from 1995 to
> the present are for a five year bull market in stocks. You can draw your
> own conclusions but I submit the "perception" of "where we were" in the
> economic cycle was almost as important as the reality. By that I mean,
> early concerns about inflation turned out to be premature as the ebs and
> flow of the economy revealed itself in economic and productivity
indicators.
>
> My (pre 911) perception was the economy was weak, over-capacity abounded
> and as I have maintained for some time, deflation should be the concern.
> How bonds will react to these "new"conditions remains to be seen. I can
> build a case almost either way depending on which chart you look at
> presently (long term top in bonds or a move to new highs), so in that
regard
> we are at an important inflection point perhaps. It is at these times,
> maybe the "overall perception" needs to be analyzed? Massive financial
> stimulus is occuring, the return to deficit spending and with that
normally
> comes the fear of inflation, yet bonds have been rallying, the question
is
> why?
>
> What I like about bonds is they "do trend and tend to have sustained
moves"
> once turns occur. I don't plan to "feed the gator", so it will be nice
when
> they show their hand utimately.
> don ewers
>
> ----- Original Message -----
> From: "Dorothy Carter" <dorothy.carter@xxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Saturday, October 20, 2001 12:15 AM
> Subject: Re: [RT] bonds top?
>
>
> Up until recently we had since the 9/21 low the bonds and stocks pretty
> much rallying together.. My premise is that the US$ is getting up
> against resistance and as soon as we see US$ reverse I would expect to
> see foreign sellers come in again and sell both stocks and bonds. Bonds
> have their own issues right now in addition to potentially a US$ that
> resumes it's downtrend.. ie new corp supply and US Govt refunding and of
> course concerns over deficit spending because of cost of security etc
> from 911 . I think that this next leg that Bonds, Equities and US$
> will go down together... I don't see the Bonds going down because the
> stocks are going up. I can only speak for what I see happening here
> shortly.. once we get to a low which I would not label "retest" for
> equities as I see the Sept low taken out and not a significant low.
>
> ----- Original Message -----
> From: Lee Morris <mailto:LMorris@xxxxxxxxxx>
> To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
> Sent: Saturday, October 20, 2001 1:03 AM
> Subject: RE: [RT] bonds top?
>
> would a bond top support an equity advance (after retest)
>
> -----Original Message-----
> From: Dorothy Carter [ mailto:dorothy.carter@xxxxxxxx
> <mailto:dorothy.carter@xxxxxxxx> ]
> Sent: Friday, October 19, 2001 10:55 PM
> To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
> Subject: Re: [RT] bonds top?
>
>
> I agree.. I've been saying that for the last 6 weeks since the prior
> peak pre 911.... Retail has been plowing $$$ into bond funds.. look at
> Ford today whose credit was downgraded.. they increased the size of
> their bond deal.. the feeling on the street was float as much debt as
> you can while you can because as you know the lower the rating the
> higher interest rate you have to pay. Next week the Govt. bond market
> has refinancing of I believe 2 & 5 yrs and a pretty heavy Corp
> calendar as well.. supply concerns are going to put a lid on this mkt as
> well as concerns about the deficit spending.. Today's reversal in the
> long bond does appear as I suggested that we are making a H & S
> formation... I would expect 102.12 - 102.06 to be seen and If I get
> lower targets I'll share it with you.
>
> ----- Original Message -----
> From: Don <mailto:detomps@xxxxxxxxxxx> Thompson
> To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
> Sent: Friday, October 19, 2001 10:29 PM
> Subject: Re: [RT] bonds top?
>
> Don and Lee,
> Merrill-Lynch is furiously packaging bonds for the public.. broker
> bragging of x Hundreds of Millions going into these packages. I always
> get interested in a top when ML starts really marketing. The last time
> was the intro of their B to B internet holders.. it had to have called
> the top by a couple of weeks.
>
> Don
> Subject: RE: [RT] bonds top?
>
>
> Don, interesting - first it is interesting to see you use the gator. I
> just ffinished his book and like the system. Answer me this batman -
> what is a yawn and there does not appear to be a way to do his momentem
> indicator "AC" in AGET as it is a MA of the 5/35 do you just ignore this
> indictor or have you found a way around this limitation. thks
>
> -----Original Message-----
> From: Don Ewers [mailto:dbewers@xxxxxxxxxxxxx]
> Sent: Thursday, October 18, 2001 8:08 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: Re: [RT] bonds top?
>
>
> Attached are the AGET charts (60min and daily).
>
> The 60min chart which is measuring the "wave 4 from 9-20-01 on the
> daily"
> indicates we may make another new high to a MOB (108-16 to 108-24) at
> least
> (it can go higher) so in agreement with Clyde's chart.
>
> The fact that the bond retracement has exceeded a .786 retracement on
> the
> daily is a clue that maybe the 60min is right? The MOB on the daily
> is
> somewhat lower (107-24 to 108-01 but it is not locked in yet so may
> change
> (locks if a new high is made)).
>
> Ignor the gator (three bold colored lines) on the 60min although it has
> made
> some great calls lately.
> don ewers
>
> ----- Original Message -----
> From: "Dorothy K. Carter" <dorothy.carter@xxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Thursday, October 18, 2001 1:05 PM
> Subject: Re: [RT] bonds top?
>
>
> I don't know how accurate the vol is on my source.. but it appears bonds
> have been rallying on liter vol. than the down draft low going into
> 9/20. chart appears to be making right shoulder....... I'd still guess
> we are in window coming up shortly where bonds,stocks and US$ resume
> down together .. I'd still watch for 102.12 102.06 target to be met
>
> ----- Original Message -----
> From: Clyde Lee <mailto:clydelee@xxxxxxxxxx>
> To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
> Sent: Thursday, October 18, 2001 1:42 PM
> Subject: Re: [RT] bonds top?
>
> We've retired SwingMachine for a while but SwingTimer show the
> attached.
>
> Clyde
>
> ----- Original Message -----
> From: azeem <mailto:azeemb@xxxxxxxxxxxxx>
> To: realtraders@xxxxxxxxxxxxxxx <mailto:realtraders@xxxxxxxxxxxxxxx>
> Sent: Thursday, October 18, 2001 11:11 AM
> Subject: [RT] bonds top?
>
> will bonds exceed prevoius high? or is this the top
> what does the waves say?swingmachine say?
> thanks
>
>
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