Interest Rate Determination|Interest Rate Direction|Interest Rate Level|Interest Rate Analysis
Interest Rate Forecast|Interest Rate Outlook


The BottomLine®

Stochastic
K/D
%

60 Min
NEUTRAL
83.00/81.00
100 Min
NEUTRAL
89.00/89.00
Daily
BULLISH
48.20/35.44
Weekly
BEARISH
59.21/64.79
Monthly
NEUTRAL
25.83/29.52



SEP BONDS H:154.31 L:154.15 C:154.25 +.23   JULY 21, 2017
[THE BottomLine® WILL ONLY BE UPDATED EACH FRIDAY AFTER THE CLOSE. GO TO THE StoMaster® PDF DOWNLOAD DOCUMENT, UPDATED EACH AND EVERY DAY, FOR TIMELY ANALYSES]

HEADS UP: ALERT!! : THE MONTHLY STO MEMORIALIZED ITS DOWNCROSS ON 06/30/15. ALERT!! THE MONTHLY STO DOWNCROSSED ON 06/02/15!!. WE MAY NOW ANTICIPATE A SECULAR BEAR MARKET FOR THE NEXT 12-15 MONTHS, THE AVERAGE CYCLE OF THE MONTHLY STO. DO NOT DOUBT THE VERACITY OF THIS SIGNAL, FOR ONE IRONCLAD STO RULE IS ABSOLUTELY CLEAR; NEVER FADE THE MONTHLY STO!! WHY? “’CAUSE THE STO DON’T LIE!!”


NEW STUFF!! Read why interest rates will be significantly LOWER, not higher as consensus would have you believe, in 2014. For this iconoclastic view, see StoMaster's "NEVER FADE THE MONTHLY STO"

Are you wondering what will happen to the 30 year bond after the end of QEII? For a full analysis, see StoMaster's "THE END OF QEII - WHAT TO EXPECT - A DIFFERENT VIEW"

Historical Synopsis

1996-1998

(The Bull Market of 06/97-11/98)

In early December, 1996, StoMaster held:

"Within the context of a slowly emerging bull market as adumbrated by the Monthly's upcross on 12/02/96, it should be remembered that the Weekly's downcross of 12/16/96, marking the exordium of its bear cycle, will weigh heavily on the market until the end of January, or early February, 1997."

Early in 1997, StoMaster maintained:

"The recrosses of both the Monthly and the Weekly to the upside and subsequent downside in mid-February have not yielded the bullish profiles required to catalyze the secular bull move anticipated for 03/07/97. This in no way implies a bear market in the offing, nor does it abstract from the eventuality of the bull call, but merely extends its commencement to the the end of the Federal Reserve tightening cycle, or until the long term technicals repair themselves."

A few months later, StoMaster maintained (this written as of early March 1997),

"the bond market has established a range between the June 12, 1996 low of 105.10 and the February 18, 1997 high of 114.08. This ostensibly wide chasm represents only 90 bps in the 30-year bond yield. The past retracements since 06/96 have been neither secularly bullish or bearish. However, it is StoMaster's strong belief that the next bona fide secular move will be bullish."

Finally, in late March 1997, StoMaster asserted:

"With the FOMC 03/25 firming of the Fed funds rate by 1/4 % to 5 1/2%, bonds will be hard pressed to find a bid in the near term, not because of the higher interest rate environment, but because this marginal tightening leaves the door open to and, in fact, mandates at least 2 more 1/4% increment bumps. The bond price prognosis would be considerably improved had the Fed raised the funds rate by 3/4%, admittedly a politically infeasible alternative. Nevertheless, had it occurred, the bond vigilantes would be unimputably sanguine in the knowledge that no further firming was contemplated, nor required. In that climate, bonds would have improved as they did on 11/15/94 after the Fed raised the funds rate by 3/4% to 5 1/2% on the heels of four prior marginal tightenings commencing on 02/04/94, with the funds rate at 3%."
For a full analysis, see StoMaster's "THE FED-OUT OF CONTROL"

Also, check out StoMaster's seminal piece on how a fundamentally changing yield curve will affect the bonds at "A CURVE WITHOUT BEND-THE NEW BOND VIGILANTE FLATLINERS"

1998-2000

(The Bear Market of 11/98-02/00)

By November 30, 1998, the secular BULL market begun June 30, 1997 had officially ended with a memorializing downcross of the Monthly Sto, and the genesis of the secular BEAR market of 1998-1999 begun.

Prior to that kairos, StoMaster had penned in late September, 1998 and late November, 1998 two screeds as adumbrated below:

To fully understand why the secular bull market in bonds begun 06/97 officially ended on 11/30/98, and why the bear market of 1999-2000 endured for 15 months, "THE STO DON'T LIE" is a must read. [Note: This is a .pdf file requiring the Adobe Acrobat plug-in or Reader.]

Promise for the Millennium you will read "THE FED'S 1998 CHRISTMAS WISH" [down and dirty vernacular version], a provocative fundamental analysis (even a year later) of potential Fed strategy and some subtilties of international trade which have operated in 1999-2000 to defuse deflation and pressure the long bond. A great companion piece to the technical analysis view of "The Sto Don't Lie" [Note: This is a .pdf file requiring the Adobe Acrobat plug-in or Reader.] Also available in euphuistic, purple prose at "THE FED'S 1998 CHRISTMAS WISH" [highly stylized literary version] for those who enjoy vocabulary enrichment.

ALERT!! Be sure to read StoMaster's ®  timeous squib entitled "ACT LIKE A GOOSE - FLY SOUTH" to be alerted to the demise of the secular bull market of '00-'01 and the genesis of the secular bear market of '01-'02. A MUST read with the tract below in order to appreciate a full peak-to-peak super-cycle

Be sure to read StoMaster's ®  timely croquis entitled "BE ON THE NORTHBOUND TRAIN" to be apprised of the concluding days of the secular bear market of '98-'00 and the birth of the secular bull market of '00-'01.

CURRENT TECHNICALS

FOR CURRENT TECHNICALS CLICK StoMaster. THIS IS THE PDF DOWNLOAD DOCUMENT

FLASH POINTS

RECENT FLASH POINTS FOR THE SECULAR TREND AS DEFINED BY THE MONTHLY STO - NOW INDICATING A TRANSITION FROM BULLISH TO BEARISH

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