US02Y: BOND MELTDOWN / 4.00% CROSS / MACD CONVERGENCE / RSI
DESCRIPTION: In the chart above I have provided a simple MACRO ANALYSIS on current bond market meltdown where the US02Y dropped nearly 25% within FIVE TRADING SESSIONS.
POINTS:
1. US02Y deviation is simple & marked at every 1% difference as bonds rise and fall within the same range percentage therefore it has a rubber band like price action relationship with it's lowest 1% points.
2. Overlapping Orange Line represents ES1! a US Market Future.
3. Dotted Green Lines represent continuous downward momentum in past Bear Markets (2002 & 2008).
4. Bubbles overlapping dotted green lines represent initial break of supporting bond percentage %.
IMO: In my opinion the most concerning factor to take into consideration when it comes to current bond positioning is the STEEP RISE IN PERCENTAGE especially when the overall US market momentum is tied to BOND PERCENTAGE during both RISES & FALLS & the STEEPER THE INCLINE THE STEEPER THE DECLINE can become.
MACD: Notice a complete meltdown of Bonds when MACD confirms convergence to MEDIAN & eventually breaks past median and falls into into negative territory.
RSI: Notice that unlike in other recessions RSI levels have seen more consistent exposure to MEDIAN of 50. But as of lately from a MACRO perspective that is not the case as we have seen current RSI levels linger around 70 or above in EXTREMELY OVERBOUGHT TERRITORY.
SCENARIO #1: In a very BEARISH scenario we come to see BONDS PERCENTAGE go through a complete free fall.
SCENARIO #2: In a less BEARISH scenario we come to see BONDS PERCENTAGE go through an extended consolidation phase with PERCENTAGE LINGERING ABOVE 4%.
FULL CHART LINK: tradingview.com/chart/UUCv2fGk/
US02Y
POINTS:
1. US02Y deviation is simple & marked at every 1% difference as bonds rise and fall within the same range percentage therefore it has a rubber band like price action relationship with it's lowest 1% points.
2. Overlapping Orange Line represents ES1! a US Market Future.
3. Dotted Green Lines represent continuous downward momentum in past Bear Markets (2002 & 2008).
4. Bubbles overlapping dotted green lines represent initial break of supporting bond percentage %.
IMO: In my opinion the most concerning factor to take into consideration when it comes to current bond positioning is the STEEP RISE IN PERCENTAGE especially when the overall US market momentum is tied to BOND PERCENTAGE during both RISES & FALLS & the STEEPER THE INCLINE THE STEEPER THE DECLINE can become.
MACD: Notice a complete meltdown of Bonds when MACD confirms convergence to MEDIAN & eventually breaks past median and falls into into negative territory.
RSI: Notice that unlike in other recessions RSI levels have seen more consistent exposure to MEDIAN of 50. But as of lately from a MACRO perspective that is not the case as we have seen current RSI levels linger around 70 or above in EXTREMELY OVERBOUGHT TERRITORY.
SCENARIO #1: In a very BEARISH scenario we come to see BONDS PERCENTAGE go through a complete free fall.
SCENARIO #2: In a less BEARISH scenario we come to see BONDS PERCENTAGE go through an extended consolidation phase with PERCENTAGE LINGERING ABOVE 4%.
FULL CHART LINK: tradingview.com/chart/UUCv2fGk/
US02Y
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