In this video, Alex Spiroglou of S.M.A.R.T. Trader Systems Ltd. shares some thoughts on the bond market.
He mentions that he will focus on three reasons, why he believes the late October bottom in the bond market has potential.
Reasons for Believing in the Bond Market Bottom
The breakout above the 200-day moving average for ten-year Treasury note Futures indicates a potential trend change.
The break is accompanied by a break of the 100 level for the MACD-v indicator, which suggests strong momentum.
This breakout differs from previous false breakouts as it shows technical momentum reasons.
The MACD-v indicator being consistently above 100 adds validity to the breakout.
The current momentum high at 116 is a new high for the past three years, indicating further potential upside.
Seasonality and Historical Factors
The bond market has been moving counter-seasonally since October, suggesting strength beyond its usual bearish period.
A new momentum high after three years indicates a potentially valid breakout.
Seasonality usually bottoms out around late December and remains positive into February, providing additional support for a bullish outlook.
Bonus Reason: Potential Fed Policy Reversal
Speculation about a possible reversal in US Federal Reserve policy may lead to rate cuts in the future, historically causing bond market rallies ahead of such changes.
Learn more about Alex Spiroglou here