I've been very vocal in my belief that we've entered a secular bear market for bonds, and you can paint me squarely in Julian Robertson's camp
. The question, of course, is always one of timing. The late 2008 move up in the long-bond price was staggering in size and speed, and the drop back since the peak has been almost as sharp - particularly if we consider that the Fed has been bending over backwards to keep rates low.
The point is that using the
"continuous 30-year Treasury contract
" (US1) with DeMark now shows
a Perfected 9 Buy Setup on the weekly chart - and, if the price ticks below 115-23 in the next couple of days, it will register both a Perfected 9 Buy Setup and a completed Countdown 13 Buy Setup on the daily chart. This is all happening very close to TDST support, as well as an obvious trendline-support level.
Just as the making of the high temporarily ignored a Countdown Sell Setup, it wouldn't surprise me if bonds do
continue down to the TDST line. But for my money, I see more risk of a retracement to the 125-130 level than of a straight knifing-through support. If the latter were to happen, it probably would happen in the context of a complete currency debacle - something that's coming soon, but probably not quite yet.
I'm not inclined to buy bonds here, but I have no desire to be short until we either get higher prices or something happens to unravel the dollar.
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