 | Stochastic
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60 Min BULLISH 55.00/52.00 |
100 Min NEUTRAL 52.00/61.00 |
Daily BULLISH 77.37/69.23 |
Weekly NEUTRAL 27.61/26.00 |
Monthly NEUTRAL 64.66/66.99 |
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THE UPCROSS OF THE MONTHLY ON 09/19/06 FUGLES THE END OF THE 12 MONTH SECULAR BEAR MARKET BEGUN OCTOBER 2005. DURING THAT PERIOD, BONDS DECLINED FROM THE 118 HANDLE TO THE 105 HANDLE, OR APPROXIMATELY 13 POINTS. TO BE LEGIT, THE UPCROSS MUST MEMORIALIZE ON THE LAST DAY OF SEPTEMBER. IT IS ALL BUT CERTAIN THAT BETTER BOND BIDS WILL BE REALIZED IN THE COMING MONTHS, THIS NOTWITHSTANDING BEARISH GAPS BELOW IN THE HONDO AND DAILY STO’S. EUREKA!! THE MONTHLY MEMORIALIZED ITS UPCROSS ON 09/29. THE SECULAR BULL MARKET OF 2006-2008 HAS BEGUN! TO REVIEW FOR COMPARISON STOMASTER’S LAST BEAR MARKET CALL: STOMASTER 10/03/05: “The Monthly’s downcross on 10/03/05 preambles the concluding moments of the secular bull market of July 2004-October 2005. Fibrillation about the crossline is not uncommon pending memorialization, especially in the early stages of a secular turn. REMEMBER: The downcross on 10/03/05 heralds the coming change in that secular trend of the bond market from bullish to bearish. Though this sea change must still be legitimated with a memorialization at month’s end (i.e. a close in the downcrossed position), the inevitability of such occurrence, given the 15 month duration of the concluding upcycle (ave.=12-15 months), is axiomatic. AND ON 10/31, THE MONTHLY MEMORIALIZED ITS DOWNCROSS.” 09/19/06 NOTE: IT IS ALL BUT CERTAIN THAT BETTER BOND BIDS WILL BE REALIZED IN THE COMING MONTHS, THIS NOTWITHSTANDING BEARISH GAPS BELOW IN THE HONDO AND DAILY STO’S. THOSE GAPS NORMALLY WOULD INJECT A CAUTIONARY NOTE TO THE DURATION AND DEGREE OF THE COMING MONTHLY UPCYCLE (I.E. SOMETHING LESS THAN A FULL 12-15 MONTH UPCYCLE AND HOLDING WELL BELOW THE 123^03 ALLTIME HIGH.) HOWEVER, GIVEN THE FACT THAT THE UPCROSS IS OCCURRING FROM THE 3RD LOWEST LEVEL K/D ON RECORD FOR THE MONTHLY STO, IT IS STOMASTER’S UNEQUIVOCAL OPINION THAT THE HISTORIC HIGH WILL BE TESTED IN THE NEXT 12-15 MONTHS. ONE IRONCLAD STO RULE IS ABSOLUTELY CLEAR; NEVER FADE THE MONTHLY STO!! WHY? “’CAUSE THE STO DON’T LIE!!”
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In early December, 1996, StoMaster held:
Early in 1997, StoMaster maintained:
A few months later, StoMaster maintained (this written as of early March 1997),
Finally, in late March 1997, StoMaster asserted:
Also, check out StoMaster's seminal piece on how a fundamentally changing yield curve will affect the bonds at "A CURVE WITHOUT BEND-THE NEW BOND VIGILANTE FLATLINERS"1996-1998
(The Bull Market of 06/97-11/98)
"Within the context of a slowly emerging bull market as adumbrated by the Monthly's upcross on 12/02/96, it should be remembered that the Weekly's downcross of 12/16/96, marking the exordium of its bear cycle, will weigh heavily on the market until the end of January, or early February, 1997."
"The recrosses of both the Monthly and the Weekly to the upside and subsequent downside in mid-February have not yielded the bullish profiles required to catalyze the secular bull move anticipated for 03/07/97. This in no way implies a bear market in the offing, nor does it abstract from the eventuality of the bull call, but merely extends its commencement to the the end of the Federal Reserve tightening cycle, or until the long term technicals repair themselves."
"the bond market has established a range between the June 12, 1996 low of 105.10 and the February 18, 1997 high of 114.08. This ostensibly wide chasm represents only 90 bps in the 30-year bond yield. The past retracements since 06/96 have been neither secularly bullish or bearish. However, it is StoMaster's strong belief that the next bona fide secular move will be bullish."
"With the FOMC 03/25 firming of the Fed funds rate by 1/4 % to 5 1/2%, bonds will be hard pressed to find a bid in the near term, not because of the higher interest rate environment, but because this marginal tightening leaves the door open to and, in fact, mandates at least 2 more 1/4% increment bumps. The bond price prognosis would be considerably improved had the Fed raised the funds rate by 3/4%, admittedly a politically infeasible alternative. Nevertheless, had it occurred, the bond vigilantes would be unimputably sanguine in the knowledge that no further firming was contemplated, nor required. In that climate, bonds would have improved as they did on 11/15/94 after the Fed raised the funds rate by 3/4% to 5 1/2% on the heels of four prior marginal tightenings commencing on 02/04/94, with the funds rate at 3%."
For a full analysis, see StoMaster's "THE FED-OUT OF CONTROL"
By November 30, 1998, the secular BULL market begun June 30, 1997 had officially ended with a memorializing downcross of the Monthly Sto, and the genesis of the secular BEAR market of 1998-1999 begun.
Prior to that kairos, StoMaster had penned in late September, 1998 and late November, 1998 two screeds as adumbrated below:
To fully understand why the secular bull market in bonds begun 06/97 officially ended on 11/30/98, and why the bear market of 1999-2000 endured for 15 months, "THE STO DON'T LIE" is a must read. [Note: This
is a .pdf file requiring the Adobe Acrobat plug-in or Reader.]
Promise for the Millennium you will read
"THE FED'S 1998 CHRISTMAS WISH" [down and dirty vernacular version], a provocative fundamental analysis (even a year later) of potential Fed strategy and some subtilties of international trade which have operated in 1999-2000 to defuse deflation and pressure the long bond. A great companion piece to the technical analysis view of "The Sto Don't Lie" [Note: This is a .pdf file requiring the Adobe Acrobat plug-in or Reader.] Also available in euphuistic, purple prose at "THE FED'S 1998 CHRISTMAS WISH" [highly stylized literary version] for those who enjoy vocabulary enrichment.1998-2000
(The Bear Market of 11/98-02/00)
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ALERT!! Be sure to read StoMaster's ® timeous squib entitled "ACT LIKE A GOOSE - FLY SOUTH" to be alerted to the demise of the secular bull market of '00-'01 and the genesis of the secular bear market of '01-'02. A MUST read with the tract below in order to appreciate a full peak-to-peak super-cycle |
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CURRENT TECHNICALS
FOR CURRENT TECHNICALS CLICK StoMaster. THIS IS THE PDF DOWNLOAD DOCUMENT
FLASH POINTS
RECENT FLASH POINTS FOR THE SECULAR TREND AS DEFINED BY THE MONTHLY STO - NOW INDICATING A TRANSITION FROM BEARISH TO BULLISH
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