Treasuries are to lose 10-15% of value in H2, bad for stocks
We have seen an ending wedge formed in Treasuries over the last year. In fact, if we take an even broader look, we have had an ending wedge within an ending wedge, which are both completed. Now we need to unwind the whole structure, and the first step should be to sell-off from 140 in TLT to roughly 120-122.
If treasuries are down by 10-15%, then I would assume stocks should be down by at least 20% (25-30% more likely). Two reasons for that: risk-parity leverage unwind and reevaluation of yields across all risk assets, which need to be in line with the increasing yields in bonds.
To recap the charts that I published earlier: we have recently completed an ending wedge in TLT, a triangle in EUR, an ending wedge in NZD, a triangle in USDCAD. All of these structures suggest a very fast movement in the new direction (2-3 months). I hope you are well positioned to address all of these opportunities.
If treasuries are down by 10-15%, then I would assume stocks should be down by at least 20% (25-30% more likely). Two reasons for that: risk-parity leverage unwind and reevaluation of yields across all risk assets, which need to be in line with the increasing yields in bonds.
To recap the charts that I published earlier: we have recently completed an ending wedge in TLT, a triangle in EUR, an ending wedge in NZD, a triangle in USDCAD. All of these structures suggest a very fast movement in the new direction (2-3 months). I hope you are well positioned to address all of these opportunities.
