The first issue here is what index to use. Here's a starter list:
TYX
TNX
ZB (cont contract, then current for shorter term moves)
ZN
TLT
AGG (based on Bloomberg Barclays Aggregate Index, not the same as the above 10 & 30 year Treasuries, but still a major bond benchmark; however, this is price and not total return)
It would be easy to pick just one but the fact is the bigger turns tend to show on most of these.
2016 July turn (the top in bonds / low in yields)
TYX QS1 exact
TNX MS1, YS2 near tag
ZB QR1 exact, YR2 near tag
ZN YR2 exact
TLT QR1 exact
AGG no level
So major levels in play for each; most especially the yearly levels on the futures were most glaring along with YS2 very near tag on TNX.
2016 Dec turn (major high in yields, low in bonds)
This one not nearly as many levels
TYX no level
TNX YR1 (bingo)
ZB MS1 only
ZN HS1 and YS1 2 day break and recovery
TLT no level
AGG MS1 near tag, not really enough
2017 Sept turn (high in bonds, lows in yields)
TYX QS1 exact
TNX HS1 1 day break and recovery
ZB YP exact (bingo)
ZN HR1 exact
TLT QR1 exact
AGG QR1 overreach then fail
Last week
TYX QR3 exact
TNX YR2 exact - enough?
ZB monthly only
ZN HS2 / QS3 combo
TLT QS3
AGG HS2
So enough here for a possible turn, most especially the YR2 on the widely watched 10-year yield. The issue is the momentum of this move in 2018 has been quite strong. TNX has been above a sharply rising daily 10MA for most of the year. Even if there is a pause at YR2 it is likely that the 20MA (last touch 12/29/2017) will be support and highs will be tested.
Though I pounded the table on taking defensive action on stocks 1/29-2/1 - and any shorts would have been very counter-trend at the time - this was confirmed by a glaring VIX, momentum overreach, sentiment extremes and simply the number of indexes on yearly levels which hadn't happened since early 2016.
I cannot do the same for bounds here. Buying below all pivots is a pure counter-trend. It could work and probably the trade is crowded at this point, but there are easier moves are elsewhere. NDX/QQQ, SMH (semi-conductors), XBI (biotechs) and KWEB (China tech) are all above all pivots. Tech is leading the market. The main strategy here at The Pivotal Perspective is to be long the leaders.
