I just posted a (truncated) overview of metals, Forex and commented on the probable increase in benchmark TNX - See broad analysis and forecasting in Gold, Silver, Copper, AUD, NZD, CAD, CHF here: - tradingview.com/v/EnsiC7jW/
In essence, fundamentals are pressuring the 10-year treasuries upwards, and the predictive analysis and forecasting has defined the following two targets:
TG-1 = 3.29 - 15 APR 2014
and
TG-2 = 3.63 - 15 APR 2014.
Pattern traders might note that a 3-Drives pattern has consumed itself at the bottom (recent bottom consolidation defines the 3-Drives pattern).
OVERALL:
A relative risk analysis might be worth effecting at this point, looking for any risk-heralding IRX/TNX line inversion, and submitting the aggregate data to the predictive analysis and forecasting system. Before such quant-analysis, let me clarify that the TNX chart remains under a "Neutral" directional bias qualifier, until the bullish reversal signal gives its confirmation. However, my own directional bias at this time is neutral to bullish, based on the fundamental and technical data discussed here and in recent charts.
Cheers,
David Alcindor Predictive Analysis and Forecasting
Get my signals, analyses and forecasts on Twitter: (Alias: @4xForecaster)
------------------------------------- Disclaimer: - All my comments are founded on unshared proprietary as well as common knowledge of technical analysis: Do your own due diligence before trading any market/asset. Additionally, my signals, forecasts, analyses and directional opinions are for educational purposes only and are not trading recommendations. Again, do your own due diligence first, then seek financial advice from a licensed professional, and only then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
18 APR 2014 - Tech-Note:
- Relative Strength between the TNX and the TYX
In order to capture slight subtleties between the 10-Yr and the 30-Yr US Treasuries, I decided to construct a relative strength chart wherein to reveal - if at all possible - subtleties, especially if a layered technical analysis (trendline, patterns, ... etc) could bring to light intricacies that would otherwise had remained unseen by the often-dormant mind's eyes.
TECHNICAL ANALYSIS DATA:
In the following chart, the 10-Yr is expressed relative to its senior 30-Yr Treasury. What comes out is a potential break-out of the 1-3-5 resistance line, which in the context of a Wolfe Waves pattern suggests that a reversal point lies at a 5-prime position.
Problem here is that, although yesterday's move in the nominal 10-Yr was of significance, in this relative strength expression, it has been dampened in a way that it remains difficult to define whether a true break-out above the 1-3-5 Line did occur. What I would have liked to see is a clear departure above that line.
Instead, I could have lined the 1-3-5 line relative to Point-5 as opposed to Point-3, causing a slight slant that would have brought Point-5 into line and kept Point-3 below the 1-3-5 Line. The result would have diminished the visual impression that today's move was a break-out.
PREDICTIVE ANALYSIS/FORECASTING DATA:
So, in light of this seemingly innocuous and perhaps trivial technical detail, I would remain put in a wait-and-see stance, until either a reversal occurs from Point-5, or indeed a loftier Point5' is about to come into definition - Of course, all this is written in the pattern trader's constant belief that a pattern is under way, which is my firm belief, mainly because of forecasting projections that also seem to define a moderate probability level, here expressed in decimal: 0.80 and 0.82.
Note that the highest level lines up with a mid-2009 period, where TNX/TYX expressed a similar relative strength.
FOREX CORRELATION / QUANT DATA:
A rising TNX is likely to pressure the US Dollar. Hence, a look at the USD crosses is worth considering, either by reverse engineering (i.e.: looking at the patterns that are likely to emanate from, say the USDCAD, USDJPY, USDCHF, as well as AUDUSD, EURUSD, GBPUSD and NZDUSD.
USDJPY / USDCHF / USDCAD:
- In the USDJPY, a prop pattern is currently favoring a decline in the USD, down to either 102.134 (Euclid Pattern), 101.970 (Great White Pattern), or 101.605 (Janus Pattern). However, the predictive analysis system remains open to the upside, and once a pattern points in one direction and my prop system points to another, I have to wait and see ("Plan the trade, then trade the plan" type of mindset)
= NEUTRAL
- In the USDCHF, A Shark pattern is eyeing 0.87281 as a probable bearish target. Here, the prop system corroborates that direction and level.
= BEARISH
- In the USDCAD, a prop pattern already completed, and the system suggests a probable limited decline. Considering the recent impulse rally from the structure low, a Fib-paced decline at 0.618 or 0.786 would print 1.09241 and 1.08941, respectively.
= NEUTRAL TO BEARISH
-----> This is Net Dollar BEARISH
AUDUSD / EURUSD / GBPUSD:
- In the AUDUSD, the issues are similar to USDJPY, where a pattern points in one direction (down), whereas the system continues to look to the upside. So, here, there is no clear direction.
= NEUTRAL
- In the EURUSD, two conflicting patterns call for opposite direction, whereas the system is looking to the upside. The bullish target is defined at 1.40474.
= BULLISH
- In the GBPUSD, a wide PRZ exists within the 1.69628/1.70196 range, along with a system that remains bullish as well. In fact, this one defined the loftiest target.
= BULLISH
- In the NZDUSD, the system reveals weakened strength to the upside, seeing a limited bullish potential to 0.86735, and perhaps optimistically to 0.87047, which would in fact inscribe a classic head & Shoulder.
= BULLISH
-----> This is net Dollar BEARISH
OVERALL:
Considering all available major positions, the grand net total is clearly = USD BEARISH. However, I would caution the Forex trader here to reconsider all the charts, analyses and data in the framework of his/her own trading plan. As we conclude the week, weekends have a tendencies to surprise markets before the curtains are pulled open and the actors' make-up dried. I would keep an eye to significant Asian and European stages, where risks in the Eastern European situation and fundamental deterioration in China could emerge as being the leading catalysts in risk-driven bond markets, and consequently exacerbate or negate the directional biases jut defined above.
Cheers,
David Alcindor
Predictive Analysis and Forecasting
Get my signals, analyses and forecasts on Twitter:
(Alias: @4xForecaster)
-------------------------------------
Disclaimer:
- All my comments are founded on unshared proprietary as well as common knowledge of technical analysis: Do your own due diligence before trading any market/asset. Additionally, my signals, forecasts, analyses and directional opinions are for educational purposes only and are not trading recommendations. Again, do your own due diligence first, then seek financial advice from a licensed professional, and only then enter the market at your own perils - David Alcindor - TradingView.com Alias: 4xForecaster
From my Twitter feed, alias: @4xForecaster:
"TNX vs TYX - Price moves as forecast. Expect more relative weakness in the 10-Yr TSY next week -
Relative strength chart between 10-Yr and 30-Yr TSY:
Price continued to move in the forecast direction, and is likely to reach down to its 1-4 Line, as per Wolve Waves pattern definition.
Cheers,
David Alcindor
PS: See alternate chart here: tradingview.com/v/CesmtF8u/
- David