T-Bond Crash Review: Correction Or A Counter Rally?

 

zbh17-nov-15-2016

 

We have all heard about the big Trump induced bond crash, but he is going to get blamed for everything, why not this T-Bond crash as well?  Many are calling for a rally as they say this is overdone. If we call this a correction, then, those that do, are still on the bullish bandwagon. If this is the real case, then these US Treasuray Bond Futures, must break out and break a new record high. On the flip side, if this crash is just the beginning of a much bigger bear market, then we can only get another counter rally.  Looking at this from a potential counter rally move, is what I’m looking for, in the coming weeks or months ahead. 

I will try and be more consistent in my descriptions, so when I talk about a correction, then my bigger outlook will be bullish,  but when I use the wording, “counter rally”,  then my larger degree outlook is still bearish.

It is not economic rocket science to know that when bonds crash, they produce higher rates in the market place. We can see the effects of higher rates already, as many are calling for a rate hike. Only time will tell us more, but if we are right with the bigger picture, then any anticipated counter rally will run out of steam, and then resume its real trend. After all, a starting set of 5 waves down, can point us in the direction of a new trend.