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It Is Time To Buy Bonds

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It Is Time To Buy Bonds


US 10-year Treasury bond prices may rise into August. The monthly histogram below shows that July and August were the two strongest months for note prices.

Monthly Statement – US 10-Year Note

Blue: Average percent change

Red: Probability of rising for the day

Green: Expected return (product of top 2)

These numbers are static because they have barely changed over the years. It’s just one cycle, a one-year cycle, and there are many cycles in play at any one time. To understand such other rhythms, run scans to identify other profitable price cycles. The chart below shows the most valuable cycles in effect at all times.

10 Year Notes Monthly Cycle

These cycles reinforce the seasonal trend of rising banknotes. During these summer months, prices have risen by 60% to 65%. With the dynamic period also rising, the probability rises to about 65% to over 70%. Fixed income markets in Japan and Germany had similarly supportive developments.

Cycle forecasts must be confirmed by market activity. The daily chart shows that the price has broken above the downtrend line.

10-Year Note Breaks Resistance

This is a useful sentiment indicator that supports a bullish view. This week’s Barron’s cover notes that interest rates are much higher. Applying the opposite view, this suggests lower interest rates and higher bill and bond prices. The first target is 123.0.

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