BRR pattern points to a true Santa rally for bonds.

2023年11月9日

A rare chart pattern second in predictive power to only the famous head and shoulders is the Bump and Run Reversal (BRR) technical pattern.
school.stockcharts.com/doku.php?id=chart_analysis:chart_patterns:bump_and_run_reversal_reversal


If it is so powerful, why is it so unheard of?
1) They are rare. But a recent BRR of very high consequence is the 2022 DXY chart.
2) They usually only occur on high time frames as they measure manias and blow off tops, or in the inverse, manic selling followed by a return to normal.
3) They are hard to chart
4) They give predictive power in terms of time, not in terms of a "measured move" of price, but in the other dimension time.

This chart shows a clear BRR reversal, 55 days in the manic up pattern, the "bump". 55 Days in the return to trend or "run". Which would create a 10 year US Treasury bond rally and likely a rally in risk on assets. Which lands us, perfectly, at yields dropping until Monday December 25th 2023.

Merry Christmas Traders!

2023年11月17日

交易進行

So far so good, rates declining at the same gradient as predicted.

2023年12月1日

註釋

Huge drop in rates again today following commentary from the Federal Reserve. Looking like we hit our target ahead of time at this rate!

2023年12月6日

註釋

Less than 0.1% percentage points to target. Crypto has been playing along beautifully as it benefits most from the lower rates environment. Some strength in the smaller cap tech stocks (Russel 2000 IWM) as well.

Feel free to take some profits here and reallocate as you like.

2023年12月13日

交易結束：目標達成

All targets hit ahead of time, Merry Christmas traders!

I'm not saying that rates won't continue to drop given wider macro economic factors and Federal Reserve opinions. What we can say however is this technical pattern has run out of predictive power as to what will happen next.