Oh Dear – That’s Not Good …

Things seem to be going so well:

• Emini was up today
• Better TRIN Oscillator turned up on cue
• US Dollar is up versus the Yen
• We had a shallow retracement today then pushed higher

So what’s the problem? Well … Bonds fell hard today.

Bonds have been in a consolidation zone for 10 days (white bars) but dropped through a rising trend line today. If Bonds are on the way down, then the stock market is likely to follow – after a suitable delay.

Bond Market Drops (Daily bars)

Turning points in the bond market can forewarn of turning points in the stock market 20 days in advance. If that’s the case we could see a turning point in 2 trading days time or possibly in 9 trading days. However, these turning points in the Bond market are not well defined – so I might be reaching a little here.

In any case, I’ll be watching the Bond market to see if this decline continues.

Good luck with your Emini trading.