T-Bonds Intraday Crash Review: Potential Mini Bear Trap?



I like to have the time to read the COT reports on the weekends, and I look for the very skewed set of numbers, between the speculators and the commercial players. Extreme differences have not really been that obvious, but the next best thing is when partial numbers look just as good. Scanning anything related to bonds, I saw all commercial positions were net long, with the speculators doing the exact opposite. Not by a huge margin, but enough that a bigger rally, may already be in progress.

At the very top, it also looks like an expanded pattern may have developed, which would turn my wave 1 bottom into a 4th wave bottom.  At the very least,  this potential bullish phase should clear all peaks presently showing.  Of course, if the expanded pattern is real, then T-Bonds could see a new all time record high. 

Since the early 1980’s the entire T-Bond bullish phase has contained a plethora of choppy wave structures, which I can only interpret as being a huge bear market rally.  Even the Fed Fund rates are crashing which they seemed to do, well before stock market bottoms. 

I’m not an expert on anything to do with the Fed fund rates, but I’m sure they will turn once we see a bottom in the stock market. Most of the time the Fed fund rates, just sit there doing very little or nothing at all. This makes watching their charts about as boring as watching paint dry. 

Any new record high might be a long shot, which would also force a new location for a Cycle degree wave 4 top.  

Market Vane reports can support a bullish phase, but not any super bullish phase lasting many years. 

One other COT set of numbers I noticed were that the commercial traders, are now net short most of the big markets, which was not the case for a very long time. This all helps to support the bearish case regarding the stock markets.  When the commercial’s shift again and become net long, then chances are good that the stock market may have hit a temporary bottom. 

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