tag:blogger.com,1999:blog-3310402797768514899.post5569936897952692585..comments2023-11-05T03:39:11.575-05:00Comments on The Technical Take: Treasury Bonds In The BalanceGuy M. Lernerhttp://www.blogger.com/profile/09198161809721597881noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-3310402797768514899.post-24807886973527916852010-01-07T22:11:42.665-05:002010-01-07T22:11:42.665-05:00The breakdown in VFITX seems even more pronounced ...The breakdown in VFITX seems even more pronounced than in IEF.RBnoreply@blogger.comtag:blogger.com,1999:blog-3310402797768514899.post-30134951961322006862010-01-07T11:11:45.782-05:002010-01-07T11:11:45.782-05:00My only caution regarding the yield curve is this:...My only caution regarding the yield curve is this: most fundamental data tends to fail at some point in time.<br /><br />Let me give you an example. I remember reading an investing book in 1999 suggesting that all you had to do to make money in the stock market was follow the Fed. In general, good advice. Ahh, but then came 2000 and if you bet on the market because the Fed lowered rates you would have been hammered in 2000, 2001, 2002. What used to work no longer worked. If you followed the old line of "don't fight the fed" you lost a lot of moneyGuy M. Lernerhttps://www.blogger.com/profile/09198161809721597881noreply@blogger.comtag:blogger.com,1999:blog-3310402797768514899.post-66022932598681881812010-01-07T09:55:12.122-05:002010-01-07T09:55:12.122-05:00btw Guy, everyone seems to put on the table the &q...btw Guy, everyone seems to put on the table the "yield curve" (or the spread between short and long term yields) and predict with it the economy. The curve, based on the last 50 years, shows big recovery; never in the last 50 years there was recession or weak activity with such a curve as today. The only problem is these times are quite extraordinary and the FED tries hard to manipulate the curve; I know "this time is different" never works and maybe there will indeed be strong economic activity.<br /><br />So while an economic recovery might drive stocks and yields higher, the problem with stocks is they are quite expensive (sub 2% yields), even if companies start to repay some dividends.<br /><br />See the link<br />http://www.hussman.net/wmc/wmc091221.htmD-mannoreply@blogger.comtag:blogger.com,1999:blog-3310402797768514899.post-67976899491201821662010-01-07T07:26:17.603-05:002010-01-07T07:26:17.603-05:00The charts are ugly; but with a longer term view, ...The charts are ugly; but with a longer term view, I try to stay out of the noise.<br /><br />This is important to me and I spend a lot of time on bonds/ yields for several reasons: 1) non correlated diversified asset; my biggest fear is that everything else runs together including commodities, stocks, reits, emerging markets; 2) if I can the secular change part correct this could be a big trade<br /><br />By the way, I think the Dollar goes higher!!! More laterGuy M. Lernerhttps://www.blogger.com/profile/09198161809721597881noreply@blogger.comtag:blogger.com,1999:blog-3310402797768514899.post-22446119840056659412010-01-07T05:32:52.881-05:002010-01-07T05:32:52.881-05:00Top notch!
I want to make a comment on chart 3 (w...Top notch!<br /><br />I want to make a comment on chart 3 (weekly yields). And I'll make this with the chart of LT S&P 500 you analyzed the other day.<br /><br />The idea is you get a top in the market after a couple of months of market movements drawing 2 or more clusters of negative divergences; this is the typical M top.<br /><br />Although chart 3 is weekly and not monthly, we can formulate a conclusion for the intermediate term.<br /><br />We can clearly see we have a cluster of negative divergences for the first part of the M formation (if this will prove to be an intermediate M top); now if the market draws another cluster of negative divergences for the second part of the M (or double top, whatever you wish) and rolls over, yields will go lower in 2010.<br /><br />The pivot of the M is at 31 as drawn on the chart. Subtracting this from the top at 38 we get a target for TNX <br /><br />31 - (38 - 31) = 24<br /><br />which means we will revisit the low yields seen back in 2008.<br /><br />LT it's another story as you say.<br /><br />What this means for the economy? Another round of "deflation trade"; of course this is very difficult to predict as there is so much intervention out there by the FED, Congress (I assume that's why analyzing these charts is so difficult and the charts are so ugly). It's basically a battle between the true deflationary forces in the economy and the printing presses of central banks; imo, the markets are rigged, but that's of course personal opinion and I don't think we'll find that out anyway :)<br /><br />All in all, these are very ugly and choppy charts.<br /><br />thanks again for this detailed analysis!D-mannoreply@blogger.comtag:blogger.com,1999:blog-3310402797768514899.post-13176192996186923842010-01-07T01:19:55.321-05:002010-01-07T01:19:55.321-05:00Excellent, thorough analysis. Friday's NonFar...Excellent, thorough analysis. Friday's NonFarm Payrolls number may resolve the issue in the near term. Due to seasonal adjustments, we could get a very high number (+100,000 or so), which could send yields much higher.Johnny G.noreply@blogger.com