Sunday, March 02, 2008

2 Month Cycle Of Lows In The Bond Market



It would have been nice if I posted this chart for all of you before Friday but I totally forgot about it.

Above is a daily chart of the 30 year bond. What's interesting about the above chart is that there is a very accurate cycle of lows that occurs every 2 months. All of those vertical lines are exactly the same distance apart and as you can see big rallies tend to take place around those lines. Also notice the stochastic oscillator confirms most of the lows by moving below the buy line and then turning back up.

Based on the above chart, my guess is that the bond market will make new highs for the year. Lets keep an eye on this cycle and watch for the next cyclical low which is due around late April.

1 comment:

Anonymous said...

Correct. The trade of the generation is forming. Bonds will explode to all time highs never seen before when the market undergoes a massive decline. The fear and subsequent flight to bonds will however reverse suddenly and a fortune could be made on shorting bonds at that point. At the same time gold will first plunge and then skyrocket to almost $2000/oz. Short bonds & buying physical gold will be the the trade of a generation.

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