I believe that next week is when this trend has the chance to really take off. The reason being that it will be the start of a new quarter and that is when new decisions get made and they get made pretty aggressively especially at the beginning of the quarter. Bonds have had a bad quarter, but very likely next quarter they will have a far worse quarter as capital shifts out of bonds and into equities.
By: Technical Tim
11:17AM March 28, 2012
I think your analysis is excellent and also noticed the recent alert about TLT/TBT via market coverage. The only minor dispute I have is this notion that an anticipated fluctuation in the bond market is going to generate this 'redirection' of overwhelming amounts of capital into the equities markets to recharge another 1-3mo rally. I disagree with this & might even consider it a pipe dream for the short term forecast. Without going into technical illustrations, I firmly believe that without another QE renewal & with Europe still solving virtually nothing via liquidity/collateral methods, I'll expect to see a short term dollar rally & obviously since Euro is polarized it will perform the inverse pattern of the dollar trend. On that currency basis, I believe the equity markets have run about as much as they possibly can & put in a resistance level which will prevent further advances and whenever the US dollar has made strides, the equity markets suffer in correlation to currencies.
Just my thoughts.
I appreciate your comments and I do try to balance out the fundamentals with the technicals of price and sentiment to find low-risk entry points in any market. If you have a market at an extreme, feel free to point it out to me and we can explore it together here at Tradingview.
Many thanks - Tim
This is my first visit to this site so maybe I shouldn't be taking the discussion from chart analysis to overall market/currency forecasts. However, your first statement about the VIX seems like you're already concerned about a major market pullback. However, it's kind of a contrast/paradox if you're saying you're concerned the VIX is way to low and headed north with a market retrace...and then in another statement you're bullish the market overall per bond market fund moves to equities for another recharged bull run building on Jan-Mar 2012 uptrend. I agree with your chart analysis 100%. Just not the common opinion which is stated on CNBC that bond market money is headed for equities. Not necessarily safe to assume this will be a certainty.
Good chatting with ya.