Clean Break To The Upside
Falling Wedge Pattern
Success rate : Falling wedge statistics - In 82% of cases, the exit is bullish. - In 55% of cases, a falling wedge is a reversal pattern. - In 63% of cases, the pattern's price objective is achieved when the resistance line is broken.
Why should you buy into bonds after a rate cut?
HERE ARE 5 REASONS...
When a central bank cuts interest rates, bonds can become more attractive for several reasons:
1: Bond Prices Tend to Rise: When interest rates fall, the yield on new bonds is lower, making existing bonds with higher yields more attractive. As a result, the price of existing bonds rises, which benefits those who already own them or buy in anticipation of further price increases.
2: Fixed Returns Become More Attractive: After a rate cut, returns from savings accounts and other short-term investments decline. Bonds, offering a fixed rate of return, become more appealing, especially for income-focused investors looking for stability in a low-rate environment.
3: Lower Future Borrowing Costs: A rate cut often signals that borrowing costs will stay low, benefiting businesses and governments that issue bonds. This may lead to more bond issuances, and investors can capitalize on buying bonds before yields drop further.
4: Hedge Against Economic Uncertainty: Rate cuts often occur during economic slowdowns or periods of uncertainty. Bonds, particularly government or high-quality corporate bonds, are seen as safer investments compared to stocks, making them attractive for risk-averse investors.
5: Capital Gains Potential: As bond prices increase with falling rates, there is an opportunity for capital gains. Investors can potentially sell bonds at a higher price than they were purchased for, profiting from the price appreciation.
In short, buying bonds after a rate cut can offer both income stability and the potential for price gains, especially in a low-interest-rate environment.
Success rate : Falling wedge statistics - In 82% of cases, the exit is bullish. - In 55% of cases, a falling wedge is a reversal pattern. - In 63% of cases, the pattern's price objective is achieved when the resistance line is broken.
Why should you buy into bonds after a rate cut?
HERE ARE 5 REASONS...
When a central bank cuts interest rates, bonds can become more attractive for several reasons:
1: Bond Prices Tend to Rise: When interest rates fall, the yield on new bonds is lower, making existing bonds with higher yields more attractive. As a result, the price of existing bonds rises, which benefits those who already own them or buy in anticipation of further price increases.
2: Fixed Returns Become More Attractive: After a rate cut, returns from savings accounts and other short-term investments decline. Bonds, offering a fixed rate of return, become more appealing, especially for income-focused investors looking for stability in a low-rate environment.
3: Lower Future Borrowing Costs: A rate cut often signals that borrowing costs will stay low, benefiting businesses and governments that issue bonds. This may lead to more bond issuances, and investors can capitalize on buying bonds before yields drop further.
4: Hedge Against Economic Uncertainty: Rate cuts often occur during economic slowdowns or periods of uncertainty. Bonds, particularly government or high-quality corporate bonds, are seen as safer investments compared to stocks, making them attractive for risk-averse investors.
5: Capital Gains Potential: As bond prices increase with falling rates, there is an opportunity for capital gains. Investors can potentially sell bonds at a higher price than they were purchased for, profiting from the price appreciation.
In short, buying bonds after a rate cut can offer both income stability and the potential for price gains, especially in a low-interest-rate environment.
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