In it, Mike highlighted the "increasing fear" in the bond market, with longer-term rates projected to continue to rise, and in the "Fear Index" itself, the VIX, suggesting increased risk in the equity markets.
The discussion turned out to be a valuable heads-up to MPTrader members in view of the subsequent dismemberment of the bond market into late last week, when longer-term (10- Year) Yield rapidly backed up to 1.61% from the 1.25% level it was at when Mike first posted his analysis on February 17.
At the same time, the equity markets sold off strongly last week, with the S&P 500 shedding 2.4% and the Nasdaq 100 losing 4.9%.
Mike posted frequent 10-Year YIELD and TLT updates throughout the week, looking for signs of upside exhaustion in Yield and downside exhaustion in the TLT, followed by signs of a countertrend move.
Early Friday morning, Mike wrote:
"Ahead of the trading day, let's address again the elephant in the room, the bond market via my attached 4 hour chart of the TLT, which shows today's pre-market strength into the 140.20 area compared with yesterday's violent, capitulation down-spike to 136.61. During the hours since the spike low, TLT has climbed 2.6%. Let's notice that as of last evening, DSI (Daily Sentiment Index) registered a very bearish and oversold figure of 9, which at the very least is a warning to bond bears that the market could be a bit too comfortable and entrenched on the short side."
What's next for TLT and 10 year Yield? Will the recent behavior of the bond market continue to impact the equity indices?
Join Mike and our members for constant intraday discussion of bond market and index ETFs, individual equities, macro indices and ETFs, commodities, precious metals and miners.
Eight weeks ago, Mike Paulenoff discussed the budding technical setup and upside breakout in CRWD (CrowdStrike Holdings) with our MPTraders members, writing:"CRWD has followed the bullish scenario we discussed in late August, and in fact, today (10/06/23) has thrust above 5 months of resistance to new recovery high territory at 176.32. Although my next optimal upside target zone is 190-200, the BIG picture setup points to 230-240 thereafter... Last is 174.86...
On Monday morning, November 13, 2023, a full 5 trading sessions before the approaching November Options Expiration (OPEX) (11/17/23), I posted my chart-based commentary for our members:SPY-- Considering that Friday is November Option Expiration, where are the "magnetized strike prices" as we start OPEX week? Based on my attached Hourly Chart, the magnetized strike price zone spans from 436 to 441. Should SPY take out the upside barrier of 441, then the follow-through outlier magnetized target could be as high as 450 before or on Friday.
On October 23, 2023, ten days before the November 1st FOMC meeting and policy statement, I posted the following commentary about the downward-spiraling TLT (20+ year T-bond ETF):My attached 4-hour Chart of TLT shows that the relentless and near-vertical downtrend that commenced at the beginning of August from around 100 hit a new long-term low at 81.92 this AM, positioning it in my intermediate-term optimal downside target zone from 80 to 82.
On the afternoon of September 25, Mike Paulenoff posted a warning signal to MPTraders members about the developing acute oversold condition in RTX (formerly Raytheon Technologies), writing:"RTX (formerly Raytheon Technologies) hit a new multi-month corrective low of 71.02, down 33% from the 4/10/23 post-pandemic High at 106.02. Although RTX has violated my optimal target window of 73-75, the stair-step corrective pattern off of the 4/19/23 high at 104.
On October 3, Mike Paulenoff posted the following "Heads Up!" about GLD (SPDR Gold Trust, ETF) for MPTrader members: "GLD has pressed to an important technical inflection window from 169.50 down to 166.30, from where I will be expecting corrective downside exhaustion off of the 5/04/23 high at 191.36, and new buying interest. From a nearer-term perspective, given the acute oversold but CONFIRMED Momentum reading of 17.16 an hour ago, my preferred scenario argues for another loop down that marginally violates today's low at 168.