The daily chart shows the steady eddy sideways channels in place since last summer, the overall range was 1.7% to 2.4%. The yield collapsed thru the bottom rail at 1.7% yesterday, however. The daily chart also displays positive divergence across all indicators (green lines) so a recovery bounce for yields is on tap moving forward. Keystone called for yields to travel sideways this year and maintains this concept moving forward. So much of the talk in media is about yields moving up and yields moving down but no one talks about the outcome where yields may maintain a flatish posture for a couple years or more going forward. The proposed purple channel thru 1.6%-1.8% may stay in place over the short to intermediate term and yields may simply stumble sideways, staying under 2% for months or years. This outcome would frustrate inflationists and traders that are calling for a bond top and positioned for hyperinflation.
The hyperinflation is coming, due to all the quantitative easing, but may not appear until towards the end of the 18-year cycle [1982-2000 Bull; 2000-2018 Bear; 2018-2036 Bull], say 2015-2019, rather than 2012-2013 as the majority of traders now predict. In fact these are the same traders that predicted that runaway inflation would occur from 2009 thru the present--and now we print low historic yields instead. Projection is a flat yield behavior thru 1.5%-2.0% for months, perhaps years, with hyperinflation arriving after the inflationists give up, sometime after 2014. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decison.
"Always try to exit a short play on a TICK at -1000, or conversely, exit a long play on a +1000 TICK, this way you squeeze the last bit of juice out of the trades. (If you want to go long try to time your long entry at a -1000 TICK and if you want to go short try to place your short trade as the TICK prints +1000, again, to provide a little advantage over other traders)."
ReplyDeleteHi KS, could you explain further what the above means?? What is TICK?
Also, when the chart shows a stock is positively diverging, if the market is heading downward, will it have any affect on that stock? Thanks much!
Hello Anon, the TICK indicates overall market sentiment, a high TICK corresponds to bullishness and visa versa, when the TICK hits +1000 that is too bullish so markets will reverse. So if you want to sell a long to collect profits, or enter a short play, try to do so in concert with the +1000 TICK. The reverse is true at the -1000 TICK. You can find it on stockcharts.com with $TICK and it should be readily available on your broker screen. It is a tool that helps you time when the market sentiment is at its peak so you can short at the top, or when sentiment is uber low at -1000 a good time to buy.
ReplyDeleteAbout 80%of the stocks typically move with the market but the power of positive divergence on a stock will typically fight a down market. This is why Keystone likes to play the positively diverged stocks in this overall market down trend, since they have already gotten beaten up they will tend to drop less than all the other stocks, plus, the positive divergence has them on the launch pad where they can jump higher at any time. In other words, if you find a chart that is positively diverged across all the indicators on both the daily and weekly charts, that is the one to go with and do not worry that it is opposite the overall markets.
Thanks....I knew a $TICK but never knew how to play it.
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