Cycle Trading

On September 19 we discussed that bonds were beginning to become bearish. On Wednesday, bonds confirmed a bearish cycle.

Bonds printed an extended daily cycle low last Wednesday. Bonds formed a swing low the next day and then closed above the declining 10 day MA on Monday to confirm that day 38 hosted the DCL. Bonds closed lower on Tuesday and then broke below the previous daily cycle low on Wed to form a failed daily cycle. Since Wed was only day 5 bonds could potentially go lower for the next 2 – 4 weeks before printing a daily cycle low.

Bonds have begun to close below the lower daily cycle band to establish a daily downtrend. Bonds will continue in their daily downtrend until they close above the upper daily cycle band.
weekly

Bonds are delivering bearish follow through to last week’s break of the weekly trend line. This confirms that bonds are in an intermediate cycle decline. At 12 weeks bonds could trend lower for another 6 – 8 weeks before printing their ICL