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CT Journals
Rates
December 1, 2020
Volatility Reports Bonds 12/1/2020
Long Term Bearish Since Panic Buying Top on Long Term charts from March to August 2020. The dynamics are changing.
It’s been pointed out that the junk bonds are staying in gear with stocks even though they have not confirmed new highs for several years and continue to underperforming. I would still watch that group for a breakdown as a sign that risk assets are coming undone.
In the meantime, the amount of debt is not a concern to the fiscal policymakers in the wing, and fear is starting to break higher measured by the CBOE interest rate volatility data. In fact, contrary Thinkers volatility composite has tested olf support successfully and is moving higher, another sign that risk-taking is becoming extreme.
November 16, 2020
Volatility Reports Bonds 11/16/2020
Bonds Long Term Bearish Trend Picking up Speed
Secular trends don’t turn on a dime, but they started at the end of 2017, the year of the lowest volatility in the market’s history. Since that date, even in the face of the need for increased sector rotation to outright market timing and long volatility investments, the sentiment repeats the same has to be a bullish narrative that began with QE1. But in the next forty years, we will witness a major shift that began in 1980 and is ending now. This does not mean everything is bearish, it means that strategies and timing, and time horizons will need to change.
The trend back to normal will be
November 3, 2020
Volatility Reports Bonds 11/3/2020
Bonds Long Term Bearish
The long term top has finished its period of distribution with a secondary peak at (2) in EWT terms. The I-T tidal forces are pulling prices lower – forcing rates higher – for most of the higher grade bonds.