From the Desk of Ian Culley @IanCulley

G7 central banks are cutting rates – first Canada and now the European Union.

Will the Federal Reserve follow suit in the coming months?

Investors seem to think so…

US 30-year T-bond futures have posted positive returns six days in a row – their longest winning streak since April last year.

T-bonds also broke above a key polarity zone, triggering our buy signals from last month:

I’ve made clear my disdain for buying treasuries, so the long bond trade will likely be a winner. After all, the best trades are often the hardest to take.

This is the video recording of our June 3rd Monthly Charts Live Strategy Session

From the Desk of Ian Culley @IanCulley

No matter how you slice it, bonds are stuck in a downtrend.

Perhaps bonds are carving out a tradeable low. If so, we have our levels to trade against. But price is falling away from our entry orders, heading in the opposite direction.    

You just can’t buy long-dated U.S. Treasuries right now…

Check out the U.S. T-Bond ETF $TLT:

TLT is trading beneath a downward-sloping long-term (forty-week) moving average and a yearlong downtrend line. Long-term averages and trendlines epitomize the Keep It Simple Stupid (KISS) approach to trend analysis because they work.

This historic bond market crash continues.

And to be fair, it might not seem like a "Crash" because bond market volatility is still relatively low.

So it's just been a slow painful grind lower.

But there's no evidence that it's over.

You can see the Japanese Yen continuing lower as well....

From the Desk of Steve Strazza @Sstrazza

Last week, we held our April Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

From the Desk of Ian Culley @IanCulley

Rates are rolling over… 

And bonds are catching a bid.

After four months of steady selling pressure, US Treasuries are finally carving out a tradeable low.

Let’s take a look!

Regardless of duration, the following bond charts present an identical tactical approach.

Two key themes dominate these trade setups: entry points designated by price reclaiming the February 2024 lows and initial targets set at the December 2023 highs.

Of course, there’s always an exception…

Check out the US 30-year T-bond futures:

Like the following charts, we can measure our risk at a key pivot low from late February.

This is the video recording of the May 2024 Mid-month Conference Call.

How's this messy market treating you?

Are you happy the market is a mess? Or do you find it frustrating?

Keep in mind, the S&P500 is still at the same price it was 2 months ago.

Both the Nasdaq100 and Dow Jones Industrial Average are still at the same prices they were back in February.

We're almost half way through May.

The Technology Index, which is the largest component of the S&P500 (30%) and has the largest weighting in the Nasdaq100 (50%), is still where it was back in January.

Again we're half way through May!

Meanwhile, don't forget about the Small-cap Russell2000 that's hilariously still stuck below where it was way back in December.

The Consumer Discretionary Index and Dow Jones Transportation Average are also down for the year.

That's the market we're in.

Some people keep pretending that this year is just like last year.

But I cheated. I actually looked at the data. So I know better.

From the Desk of Steve Strazza @Sstrazza

We held our May Monthly Strategy Session earlier in the week. Premium Members can access and rewatch it here.

Non-members can get a quick recap of the call simply by reading this post each month.

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends.

This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.

From the Desk of Ian Culley @IanCulley

So far, the dollar-yen is playing its part with a little help from Tokyo.

Falling dollar, falling rates, falling dollar-yen…

That’s the mantra reverberating throughout the market. 

But will interest rates get on board?

Check out the US 10-year yield climbing within a four-month channel: 

The 10-year is reacting to the channel’s upper boundary after stalling 25 basis points short of its October 2023 peak. 

Those former highs and rising trading range mark a logical area to witness a near-term pullback.

Imagine being one of these people who are lying to US citizens about falling interest rates?

Or worse, imagine being one of the poor victims who actually believed them?

Ouch.

The people lying to you include journalists across old media, a few economists that are somehow still employed, and even the President of the United States of America.

Or maybe the Biden didn't actually lie to you. It could have been the intern, who tells him what to say, that is the one behind the false information.

Either way, none of these people are here to help you. They're only here to help themselves. That's how this works.

So as investors, it's important for us to actually look to see what's happening, instead of blindly trusting some random source, even if that includes the President of the United States, who's been lying to you about falling interest rates all year.

Is the fact that he is up for reelection later this year further incentivizing these lies?

Probably.

You're finally seeing some of that defensive rotation with Utilities representing the only sector that is hitting new 6-month highs this week.

Here is a chart of Utilities relative to the S&P500, overlaid with Staples relative to S&Ps as well.

As you can see, both of these lines had been falling since 2022, because it's been a bull market.

But now that stocks have been correcting this year, you're seeing that outperformance coming from the most defensive sectors: