Last week sum: "Expectation of safe haven weakness from last week's quarterly and monthly chart analysis, in combination with both TLT and GLD opening below Q4Ps, have played out. Both had fast drops down to 2HPs. Maybe these bounce but TLT barely up with stocks down means I think break more likely."
OK folks I have nailed the bond market like no one else here with just 1 and only 1 call at a top / yield low and then was bearish bonds / bullish rates heading into Q4.
TLT below 2HP is first long term trend weakness we have seen since end of 2015. GLD also testing 2HP and not much bounce thus far. Importantly for anyone holding stock longs, VIX jumped above Q4P & OctP combo on 10/11, same day as SPY / DIA / VTI Q4P break, thereby confirming the move. That was a good reduce longs / hedge signal and in play until we see something else, which could mean pivot recovery with VIX back under those levels, or a deeper stock drop to higher VIX levels that act as resistance ie Q4R1.
Weekly chart is beginning of a long term trend change with 2HP acting like resistance. This is the first long term trend weakness we have seen since end of 2015. TLT has been the nice trending move in Q4 with stocks chopping around - straight down and not much bounce to worry about despite 2 day back above 2HP. RSI almost oversold but if it stays below 2HP trend is down. Daily tech chart that includes moving averages and Bollinger bands shows a break of D100, attempted recovery, then resistance by falling 50MA on 9/30, Q4P resistance, OctP break and wham from there. Now below D200 as well, also bearish. It is not hard to imagine Q4S2 near 128 by end of quarter given the pace thus far.
GLD also testing 2HP but not much bounce so far, and I would not be surprised at break like TLT. Perhaps YR1 will act as some support however. TLT and GLD, though timing differed, were similar technically with highs on Q4R1s, then a digestion period as MAs rolled over to negative, but when they both were below QPs for the first time in months the result was a fast drop down.
GDX for kicks
Also on 2HP support and weak bounce thus far.
I say every week that VIX weekly is a thing of beauty because that is my reaction every time i see it. VIX daily chart gave the reduce longs / hedge / short signal on 10/11, confirming the stock break, and hasn't been trying to buy anything yet. Still above Q4P - OctP combo!
Weekly above long term levels. Even daily chart holding above all pivots. I side with VIX here but so far XIV saying pullback and keep finger ready on buy button. Maybe we will see Q4P test on XIV along with other levels I'd like to test.