Before looking at bonds, here is a chart of the 30 year Treasury yield. Yield has broken above the long enduring channel. The next cycle inflection is March of next year which suggests this break has several more months to run.
Bonds extended lower last week have breaking under a series of prior lower. I’d like to see support form from a little lower and bounce retest the break before continuing lower.
The week will start of dominated by exuberance that the trade agreement with Canada and Mexico got ironed out. Plenty of economic data this week with the high point being the NFP on Friday. That means there is plenty of news that can be used to move the markets around. On to the charts.
To summarize expectations over the next three to six months: Bonds accelerate lower into spring of next year, US equities in a topping phase starting now and lasting as late as early next year, Dollar Index stronger in the period, Euro weaker, and gold net lower but should have a correction sideways to higher in the period. Let us move into the weekly charts.
I’m going to do this post a little differently than I have been in the past. I have been requested to formulate my thoughts on the big picture and what may take place over several time periods, three, six, nine months and more into the future. I won’t address that fully in this post, but later when I think more on it and prepare some charts but will mention ideas for where things could be in the three to six month window.
Bonds appear to be dropping from a completed wave (ii). We will have more confidence in that hypothesis once under 142^03.
Hope you all are enjoying the last long weekend of the summer. This next week will see people getting settled in and back to work.
The main count in bonds is the 1-2,1-2 type count where prices break lower from near here in wave (iii). Next week is the half way point from the cycle low to the next projected high, a good point to look to see if prices are going to use the cycle inflections in a low to low fashion.
I relatively recently updated the copper futures charts as requested by a subscriber. At that time, my view was that copper was moving down in the last leg of wave (a) down from the high from late last year. I now think that (a) may be complete and ready to embark on a few months of choppy retrace up. Below you will find monthly and weekly copper futures charts and also monthly and weekly charts of a copper mining ETF (COPX).
Bonds may make a deeper correction up over that of current prices but not required as on a lower time frame there is resist being tested now. That resist has caused a doji to form on the weekly bar last week.