BUND - German 10Y yield is below Japan's 10Y now. Bubble?You may think equities are in bubble. but in fact the real and massive bubble is in the global bond markets.
The Bund has reached all time low yield at 31 bps (0,31 %), which is now lower than Japan 10y bond yield at 35-36 bps. If I want to be sarcastic, I could say "what a great value!". But in fact this is a great example of how distorted mkts can become due to Central Banks' actions. I mean none of us can really believe buying a 10 year maturity bond at 0,31 bps can get you any reasonable real yields for the long run, as it is very unlikely that we see such low inflation for the next 10 years. But when money is being printed in such large amounts, that money is trying to find its way, hunting for the smallest positive return. That is shown on the chart, the trend is absolutely bullish.
However even if I am a technical trader, I can not ignore fundamental idiotism. So despite there is not yet a firm sell signal right now, I think the risk of top hunting (so selling into these rallies from time to time) is getting smaler and smaller as the lunatic global bond bubble blowing goes on.
Of course no one knows if Bund yields go maybe to negative (e.g. Swiss 10y is negative already), but the downside of shorts is more and more limited.
Still too early to call for a burst of this bond bubble, but even the strongest, centrally manipulated trends have limits, so from now I will always try to play for pullbacks.
Weekly:
- Ichimoku is strong bullish, the long term trend will not be in danger for several more months, but Price got too far above Kijun Sen and from longer term equilibrium, looks like a parabolic bullish move since end of 2014
- Heiken Ashi candle is bullish, but haDelta reached extreme high and may turn down from here.
- Supports are ard 156 and 153,60
Daily:
- Bullish Ichimoku setup with supports at 157,90 and lower at 156,20
- Today's HA candle may be a signal for a pull back if it closes with small body within prev. candles body. Also haDelta suggest some consolidation or pull back is more possible than further gains from here. The oscillator is still bullish.
