Why Bonds Might Be Nearing LowsBonds have continued their decline as the markets price in a potentially historic FOMC rate hike this week. Inflation data suggests that the Fed's rate hike trajectory is not really working and inflation is still soaring. On the other hand, multiple indicators suggest that we are in a recession, and the Fed will have to pivot their hawkish stance after this last rate hike. If that is the case, then we expect the bond market to be nearing lows. We have one more technical level before we will have to start using inverse Fibonacci extension levels to predict lows in bonds again, as 113'12 is our last technical level. The Kovach OBV also appears to be leveling off. The next targets from above are 115'03 and 115'29.
ZN1! trade ideas
Bond Market Continues to Price In Hawkish FedBonds have picked up slightly edging above 115'29. ZN had teetered about this level, breaking below it yesterday, but finding support. We did make a run for the next level at 116'20, but rejected this level, and found support again at 115'20. There is a stronger chance of a 75bps rate hike, which is pushing up yields. If we fall further, then 115'03 is the next target.
Bond Market Reacts to Nonfarm and FedBonds fell again, hitting our next target at 115'29. Yields are creeping up as the markets are pricing in the next rate hike, expected to be 50-75 bps . Nonfarm payrolls gave us some insight into economic conditions: unemployment rose to 3.7%, with a headline miss and downward revision. This suggests that the economy is weakening further, and we are in a period of stagflation. Yields subsequently weakened and we are seeing a slight pivot off 1529. If we rally, we could hit 116'20 or even 117'08. If the figures are hotter than expected it should bolster the Fed's hawkish rhetoric and we could break through 115'29, to 115'03.
Huge Volume 08/25/2022, and an important level was brokenMBK method is very interesting, this is an important level that was broken on 08/25/2022, in zn and also in zb. The t bonds markets are tending to go down with this interesting configuration. this level was tested Three times, on 8 July, 11 July, and 21 July.
Bond Yieds RiseBonds have fallen further, breaking down past 119'01 into the vacuum zone below. We are still hovering above 118'04, the next level of support, but the Kovach OBV is looking pretty bearish. We are starting to see some green triangles on the KRI around 118'20, but we should have strong support at 118'04 if current levels do not hold. If we can pivot, then 119'01 should provide resistance.
buyFor those interested in the field of investment for the long term, owners of heavy portfolios, an excellent opportunity to form the long tail candle in the last downtrend, and at resistance, followed by a green, confirming candle, and on it, the trend will reverse upwards. You can buy with profit placed below the monthly trend line due to its strength