Bonds and Stock Market Indices

Bonds and Stock Market Indices

30 Year US T-bonds

There is an increased probability for a short-term rise in US Treasuries.

As you can see from the chart below, the strongest of them is the 30 Year US Treasury Bonds. So let's focus our attention there.

Chart showing US Treasury Bonds and Notes

Such a move is backed by Commercials whose recent buying reached the highest point for the year. During this Commercial buying, we had a few pushes as described in Piece #M20. According to the seasonal chart (blue line), we could see Bonds go up.

On a more short-term basis, we see that Bonds are under accumulation. On Balance Volume (green line) is stronger than the chart. Usually, this is an indication for higher prices to come.

Chart of US Treasury bonds analysis for 12/08/2019

On Friday the market broke below the most recent short-term low (12/02/19) but failed to stay there and returned. If the price could break above Friday's high in the next few days, it will be a sign that we can expect a move towards 160.

US Stock Market

The correction discussed in the last week's commentary "VIX, S&P500 Target Zones, Options and Market Neutrality", happened. 

I've expected it to be a bit deeper but nothing is perfect. Also, it is hard to have a bigger correction while the Fed is doing the “not QE” thing 

Since that “Not QE” thing will continue I don't see why the market will not continue to move higher.

Supporting this is the rising Russell 2000 which broken the recent highs. Buying small-caps stocks is a good sign. Being the lagging US index Russell 2000 is now attracting the attention of the large speculators.

S&P500 was well accumulated during that correction which is a sign that it can reach a new all-time high. Targets from last week post are still in play.

However, as some important meetings and deadlines are approaching, falling below Friday's low would not be a good sign. I don't think a deep correction will happen but the market could enter a range.

Now, let's find your missing piece!

Vassil Banov,
Founder of Piece of Trading

Trades mentioned here are either taken or will be taken by the author if the right conditions appear. They are NOT recommendations nor any of this constitute investment advice. Please read the Risk Disclaimer

Seasonal indicators courtesy of Larry Williams, Charts made with TradeStation®.

TAGS: SP500, All-Time-Highs, SPY, Bonds, Notes, Treasuries, Accumulation, Futures

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