Cycle Trading

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The intermediate bond cycle formed a weekly cycle low in late December. Bonds went on a tear, rallying for the better part of 21 weeks.

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The intermediate bond cycle peaked last week at week 21. Bonds are comfortably in their timing band to print in an intermediate cycle low. The drop today has caused bonds to form a weekly swing high. It also caused bonds to breach the intermediate cycle trend line, signaling the bonds are ready to decline into an intermediate cycle low.

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The daily chart shows that bonds printed a peak on day 12 and broke below the daily cycle trend line today, day 15. Unfortunately a day 12 peak can resolve in either a right translated or left translated cycle. However bonds are only $1.31 away from having this daily cycle fail. And if this daily cycle fails, then that opens the door to the possibility the impending daily swing low to mark the intermediate cycle low. A break below 110.26 prints a failed daily cycle. And a failed daily cycle is the hallmark of the intermediate cycle decline.