SPX Rally Nearing Completion. USB Maybe Finished
Stock-Markets / Stock Markets 2016 Jul 12, 2016 - 02:45 PM GMT
I have been reviewing the Cycle Model and have a few observations to pass on. There is little doubt why Ben Bernanke went to visit Abe and Kuroda last weekend. The June 27 Master Cycle low is the last of its kind until October 4, 2016. It appears that this is the last chance they have of igniting a rally in order to preserve the uptrend.
I have observed that market manipulation can only be successful when it follows the trend. Theoretically, the trend may have ended on June 8, only 3 weeks from the 8.6 year anniversary of the October 11, 2007 high. However, the Brexit decline wasn’t enough to break the uptrend, hence the rally to “save it” ensued.
This has sent David Stockman into a paroxysm.
Today is day 258 in the current Master Cycle in VIX. You will notice again, a very long space between its origin and the next Master Cycle low. This projects to the next VIX Master Cycle low being sometime in November. There is a probability of a VIX low in early September, but it currently appears to be a Trading Cycle, a lesser low.
TNX surged higher this morning, but did not break out above it 15.12 high. USB is expecting a Master cycle low next week, so this could be the end of the line for the TNX decline.
The Long bond is arguably finished with its rally. The February 11 low may be considered the 34.4-year Cycle date, but the decline wasn’t structurally complete. It was the Fed and other central banks buying US Treasuries that kept the yields on a lower path for another 5 months.
A look at the monthly USB chart says it all. It is currently in throw-over, but not for very long. The time is come to exit or be short bonds.
Regards,
Tony
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