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Jason Haver: Long Bond Captures Target; S&P Approaches Its Next Targets
The bond-target capture leaves that playing field open; meanwhile equities are approaching their next targets.
Jason Haver    

Before I get into any market analysis in this update, I feel the need to briefly note the obvious: It's been a while since I've been able to write an update.  I apologize to my readers for the long hiatus; I've had difficult family issues recently, which were sapping the majority of my time and energy.  But things may finally be evening out a bit, so hopefully I can return to my regular schedule in the near future. 

With that out of the way, let's take a look at the market.  The first thing worth noting is that the 30-year Treasury Bond (USB) did ultimately capture my 138 target from February 20.  Almost immediately after it captured the target, it reversed.  And as of this moment, it's testing its 50-day moving average.  With the target capture, I'm now neutral on the long bond:  If the rally was an ABC fourth wave, then it's likely complete or nearly so, and new lows are possible from here.  On the bullish side of the coin, if the rally develops into a five-wave impulsive structure, then we'll consider the possibility that the end of 2103 marked a long-term bottom.
 

Click to enlarge
 
Moving on to equities, the last couple updates in May noted some if/then equations for the S&P 500 (INDEXSP:.INX).  As noted on the chart below:

1.  On 5/23/14: Sustained trade north of the blue trend line would suggests a trip to the red trend line (captured).
2.  On 5/30/14: Sustained trade north of the red trend line would suggest a target of 1978-89 (high of 1963 so far).

While a larger fourth wave could sneak its way in here (blue "Bull (4)"), as long as support holds, then we should probably give the benefit of the doubt to bulls for the next correction to be bought higher and into the target zone; though I'd actually prefer to see the target zone captured more directly. 
 
 

The Nasdaq Composite (INDEXNASDAQ:.IXIC) made new highs recently, and has thus officially validated the intermediate preferred count of April 7.  I presently don't have a strong opinion about how much higher wave V will carry, though current evidence suggests more upside is probable.  The worst scenario for bears here would be if the wave I have labeled as a leading diagonal (from 2010 to 2013) was instead a nest of first and second waves (as mentioned on the chart).
 

 
In conclusion, the long bond captured February's target, so I no longer see a clear trade there -- we'll simply have to wait for more information, and for the next trade to emerge.  Regarding equities, I ended my last update (May 30) with this sentence: 
 
"...in the event that SPX and INDU can power through long-term resistance and turn it into support, then this could become a trend followers market again."
 
That's where we stand at the moment.  For the time being anyway, the bull market continues; and until bears put a dent in the long-term technical picture, there's no point fighting the tape.  Equities may be close to entering a fourth wave correction, but present evidence suggests that further upside is likely to follow that correction.  Trade safe.
 
Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Jason Haver: Long Bond Captures Target; S&P Approaches Its Next Targets
The bond-target capture leaves that playing field open; meanwhile equities are approaching their next targets.
Jason Haver    

Before I get into any market analysis in this update, I feel the need to briefly note the obvious: It's been a while since I've been able to write an update.  I apologize to my readers for the long hiatus; I've had difficult family issues recently, which were sapping the majority of my time and energy.  But things may finally be evening out a bit, so hopefully I can return to my regular schedule in the near future. 

With that out of the way, let's take a look at the market.  The first thing worth noting is that the 30-year Treasury Bond (USB) did ultimately capture my 138 target from February 20.  Almost immediately after it captured the target, it reversed.  And as of this moment, it's testing its 50-day moving average.  With the target capture, I'm now neutral on the long bond:  If the rally was an ABC fourth wave, then it's likely complete or nearly so, and new lows are possible from here.  On the bullish side of the coin, if the rally develops into a five-wave impulsive structure, then we'll consider the possibility that the end of 2103 marked a long-term bottom.
 

Click to enlarge
 
Moving on to equities, the last couple updates in May noted some if/then equations for the S&P 500 (INDEXSP:.INX).  As noted on the chart below:

1.  On 5/23/14: Sustained trade north of the blue trend line would suggests a trip to the red trend line (captured).
2.  On 5/30/14: Sustained trade north of the red trend line would suggest a target of 1978-89 (high of 1963 so far).

While a larger fourth wave could sneak its way in here (blue "Bull (4)"), as long as support holds, then we should probably give the benefit of the doubt to bulls for the next correction to be bought higher and into the target zone; though I'd actually prefer to see the target zone captured more directly. 
 
 

The Nasdaq Composite (INDEXNASDAQ:.IXIC) made new highs recently, and has thus officially validated the intermediate preferred count of April 7.  I presently don't have a strong opinion about how much higher wave V will carry, though current evidence suggests more upside is probable.  The worst scenario for bears here would be if the wave I have labeled as a leading diagonal (from 2010 to 2013) was instead a nest of first and second waves (as mentioned on the chart).
 

 
In conclusion, the long bond captured February's target, so I no longer see a clear trade there -- we'll simply have to wait for more information, and for the next trade to emerge.  Regarding equities, I ended my last update (May 30) with this sentence: 
 
"...in the event that SPX and INDU can power through long-term resistance and turn it into support, then this could become a trend followers market again."
 
That's where we stand at the moment.  For the time being anyway, the bull market continues; and until bears put a dent in the long-term technical picture, there's no point fighting the tape.  Equities may be close to entering a fourth wave correction, but present evidence suggests that further upside is likely to follow that correction.  Trade safe.
 
Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Jason Haver
Daily Recap
Jason Haver: Long Bond Captures Target; S&P Approaches Its Next Targets
The bond-target capture leaves that playing field open; meanwhile equities are approaching their next targets.
Jason Haver    

Before I get into any market analysis in this update, I feel the need to briefly note the obvious: It's been a while since I've been able to write an update.  I apologize to my readers for the long hiatus; I've had difficult family issues recently, which were sapping the majority of my time and energy.  But things may finally be evening out a bit, so hopefully I can return to my regular schedule in the near future. 

With that out of the way, let's take a look at the market.  The first thing worth noting is that the 30-year Treasury Bond (USB) did ultimately capture my 138 target from February 20.  Almost immediately after it captured the target, it reversed.  And as of this moment, it's testing its 50-day moving average.  With the target capture, I'm now neutral on the long bond:  If the rally was an ABC fourth wave, then it's likely complete or nearly so, and new lows are possible from here.  On the bullish side of the coin, if the rally develops into a five-wave impulsive structure, then we'll consider the possibility that the end of 2103 marked a long-term bottom.
 

Click to enlarge
 
Moving on to equities, the last couple updates in May noted some if/then equations for the S&P 500 (INDEXSP:.INX).  As noted on the chart below:

1.  On 5/23/14: Sustained trade north of the blue trend line would suggests a trip to the red trend line (captured).
2.  On 5/30/14: Sustained trade north of the red trend line would suggest a target of 1978-89 (high of 1963 so far).

While a larger fourth wave could sneak its way in here (blue "Bull (4)"), as long as support holds, then we should probably give the benefit of the doubt to bulls for the next correction to be bought higher and into the target zone; though I'd actually prefer to see the target zone captured more directly. 
 
 

The Nasdaq Composite (INDEXNASDAQ:.IXIC) made new highs recently, and has thus officially validated the intermediate preferred count of April 7.  I presently don't have a strong opinion about how much higher wave V will carry, though current evidence suggests more upside is probable.  The worst scenario for bears here would be if the wave I have labeled as a leading diagonal (from 2010 to 2013) was instead a nest of first and second waves (as mentioned on the chart).
 

 
In conclusion, the long bond captured February's target, so I no longer see a clear trade there -- we'll simply have to wait for more information, and for the next trade to emerge.  Regarding equities, I ended my last update (May 30) with this sentence: 
 
"...in the event that SPX and INDU can power through long-term resistance and turn it into support, then this could become a trend followers market again."
 
That's where we stand at the moment.  For the time being anyway, the bull market continues; and until bears put a dent in the long-term technical picture, there's no point fighting the tape.  Equities may be close to entering a fourth wave correction, but present evidence suggests that further upside is likely to follow that correction.  Trade safe.
 
Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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