QE2 has ended so it must be time to review long term 30 year interest rate cycles, and folks its not looking pretty. The cycle we see is not one Ben Bernanke wants to know about. If price action follows the cycle we are in for a doozie fall (Autumn).
I read this post Is the Fat Lady About to Sing Again for the Treasury Bond Market? so check the cycles and I think he may be onto winner. Other tests with our volume tools also show the bulls are warming up.
With QE2 now over, I think the party is about to end for the bond market. For the last eight months, the Federal Reserve has taken down virtually all of the Treasury's new issues. That amounts to $75 billion a month. That massive candidate of new bond buying is over.
Private US and foreign central banks are not going to be able to make up the difference, no matter how many of their cars, textiles, electronics, toys, and finger traps that we buy. This big problem is that the bond market these days is very much like a Ponzi scheme. Unless there is a steady inflow of new suckers, the entire plan collapses like a house of cards.
COMMENTS: Yip not going to argue with that. What would 30 year yield at 4.8% do to the housing market, cant be good, of course if it prints 5.00%. You can expect QE3+. Watch the TYX and US Dollar. Risk Off may just get a little serious as the bond vigilantes strike once more.
The near perfect cycle oscillation doesn't mean one should execute a trade, we have no signs of strength or higher highs or higher lows, so we wont be first in, place this on the watch list to wait for bullish action to arise.