So far the October low in T-Bonds has held and T-Bonds have been in a bullish rally since. We also have a higher low which is also a very bullish sign. The Fed is already making it very clear that a “Pause” in rate hikes is coming in 2019! Rate hikes have drained the markets of liquidity and are killing the stock market bull run at the same time.
The Fed may not talk about the falling stock market, but it will do everything in its power to stop the markets from imploding. China has also made it pretty clear that they will do everything in their power to save their stock markets from crashing. This is nothing new, but dropping rates in the 2007-2009 crash pushed stocks lower, as investors just wanted out at that time, and I’m sure this will happen again as T-Bonds can keep right on soaring.
I may have to change my bottom wave count in the future, but for now, a bullish phase is what I’m looking at. I want to see more evidence this T-Bond rally is serious, as diagonal runs look and even act like bear market rallies. TLT touched a new record low and it has started to rally as well.
T-Bonds have been in a bull market since 1981 and T-Bonds have a 120-Year cycle to them that can also divide into 60-year cycles as they did from 1861 to 1981. When bonds rise in price then this takes the pressure off the Fed to keep raising rates.