Global Technical Trends
.
Bonds have more fun
The S&P topped out in April/May in 2010, 2011, 2012, and now 2013.
Subsequent pullbacks in the ongoing bull market have been 17%, 22%, and 11%, respectively. The current pullback is 7% and, as such, we believe there is further to go. This summer risk reduction is cascading through asset classes, spurred by an increased perception of Fed tapering. However, if it was not the Fed, equities would have found another reason to pullback
'tis the season.
Rates are also clearly in the limelight given the multi-quarter bearish breaks while the US dollar is revving up and still in the early days of what we believe is a long-term US dollar bull trend. USD/CAD higher is only the latest stark machination. This is weighing on commodity markets as energy, base, and precious remain under pressure.
Weekly focus: Bears rip into Rates
The old market axiom is simply ''the bigger the base, the bigger the space.'' The break in US Treasuries out of their multi-year base last week cascaded through rates markets around the globe as shown below. It is overheated, it is due to pullback.
However, the summer course of selling pressure is committed as the market moves from buying dips to selling into strength. As we highlighted in Top 10 Charts for 2013 New year, new focus, January 7, 2013, page 8, ''Rates Bull market: where there would be chart damage'' , the break above 2.40%/2.50% in US 10s suggests upside traction. 2.35%/45% should now be resistance on the downside to keep the targets near measured moves at 3.03% as rates turn the bearish corner across major markets.
Continua a leggere scaricando il file PDF
Download:Barclays Global Tecnical Trends: bonds have more fun
