Ok, play on words but work with me. In listening to all the hype we hear from the pros calling for the end of bonds, I also saw something interesting. Doesn’t mean that bonds won’t continue to decline for the forseeable future, but we may be at a short-term area of support that could coincide with an equity decline.
The dotted green line is Monthly S2 – otherwise known as the first area of extreme support for the month. Yesterday’s close was actually below this level, so we have to respect the possibility that the move will continue.
However, if the flight to safety is to come into play (and we are getting long in the tooth on the intermediate cycle in the S&Ps), bonds will rise in the near term, and so too would the dollar. But I want to watch this area for a bounce and a subsequent equity market decline. First target is the 123’20 area, which we saw only 5 days ago.
Always looking for the confluence in the markets to spot turning points. Trade well and trade the extremes!