A barometer of Investor Confidence - Treasury bond
Updated
A treasury bond is a certificate representing a loan to the federal government that matures in more than 10 years.
Since they are backed by the U.S. government, they are seen as a safe investment, particularly relative to stocks and other securities.
Treasury bond prices and yields move in opposite directions—falling prices boost yields and rising prices lower yields.
The 10-year yield is used as a proxy for mortgage rates, and other measures; it's also seen as a sign of investor sentiment about the economy.
A rising yield indicates falling rates and falling demand for Treasury bonds, which means investors would rather put their money in higher risk, higher reward investments; a falling yield suggests the opposite. Source : Investopedia.com
Conversely, this means that global stock market is still in for a bull run. If this inverse relationship between bond and equities hold as shown on chart, then as retail investors, is it not clear where we should park our funds? Or are we too scared to enter the market because of some bears spreading rumours of recession, inflation, stagflation ,etc ?
If you study the chart closely, you would notice in each LH , there are doji candles which means a trend reversal from long to short. Candlestick patterns have been studied in Japan for more than 400 years with a rich history and receive world wide recognition for its application.
The one thing I like most is it takes away human biasness, judgement and emotions away from the analysis and force oneself squarely to look at the price action. Everything that is happening and would happen are already factor into the candlestick. In short, it reflects the investors sentiment - greed, fear, anticipation, worry, euphoria, etc. Like a see-saw, one side has to be heavier to weigh down the other side. Sometimes, is the buy side and others the sell side.
For now, the sell side seems heavier and thus leading the price to go south.
Since they are backed by the U.S. government, they are seen as a safe investment, particularly relative to stocks and other securities.
Treasury bond prices and yields move in opposite directions—falling prices boost yields and rising prices lower yields.
The 10-year yield is used as a proxy for mortgage rates, and other measures; it's also seen as a sign of investor sentiment about the economy.
A rising yield indicates falling rates and falling demand for Treasury bonds, which means investors would rather put their money in higher risk, higher reward investments; a falling yield suggests the opposite. Source : Investopedia.com
Conversely, this means that global stock market is still in for a bull run. If this inverse relationship between bond and equities hold as shown on chart, then as retail investors, is it not clear where we should park our funds? Or are we too scared to enter the market because of some bears spreading rumours of recession, inflation, stagflation ,etc ?
If you study the chart closely, you would notice in each LH , there are doji candles which means a trend reversal from long to short. Candlestick patterns have been studied in Japan for more than 400 years with a rich history and receive world wide recognition for its application.
The one thing I like most is it takes away human biasness, judgement and emotions away from the analysis and force oneself squarely to look at the price action. Everything that is happening and would happen are already factor into the candlestick. In short, it reflects the investors sentiment - greed, fear, anticipation, worry, euphoria, etc. Like a see-saw, one side has to be heavier to weigh down the other side. Sometimes, is the buy side and others the sell side.
For now, the sell side seems heavier and thus leading the price to go south.
Note
Praise the Lord.Some people asked me is this strategy of drawing lines workable and can make money? I prefer to let results speak for itself and let you traders be the judge yourselves. Those who followed and use the same strategy, I hope you can share your testimonial so that more of your friends, family members ,etc can benefit too.
Sharing is caring and sharing reinforce your learning as well. It is one of the fastest way to learn. Like driving, the first time you drive, you were tensed, constantly checking this and that and your grip on the steering wheel was tight. As time goes on, you become more relaxed and get better. Sooner than you expected, now you get into the car and need not think what to do next and you are already on the highway.
The same with chart plotting and analysis. It gets better over time and your analysis become sharper.
Together, we can achieve more!
Note
strong support at 128.035. It has proven with a fairly strong rebound. This support needs to be broken down in due course for it to hit the target of 126.271. Now that the elephant in the room is out (US-CHINA trade agreement), we probably have to await some critical news to break this price down.Be patient
Note
Hmm, it has gone up fairly strong on 128.035 support. With uncertainty hanging over US Iran matter, investors are flocking to safe haven assets. Bond is one of them.Note
Selling should resume this week
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