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New alignments: None
US Corporate bonds represents one of the few organized market in the Matrix, while most struggle to their direction. Corporate and Treasury yields have been falling as investors opt for safety (a relative word) during the trade war. Investors are finally realizing that that the trade war could be longer and more painful than originally advertised. Funny how the invisible hand sees things much different than politicians and talking heads.
Yields on Treasuries have touched their lowest level since 2017. These bullish moves, especially in Treasuries, are being offset by extreme distribution from the invisible hand. Subscribers should be noticing, for example, that long bonds' DI is -97%. The lowest possible reading is -100%. DI readings near -100% defines extreme distribution, a majority buying without fear against the invisible hand. Even more concerning is DI2. DI2, a measure of duration, has fallen to -57% and -62% for long bonds and the 10-year. This tells us that the extreme distribution has been taking place for weeks/months. Bottom line, the Matrix is telling subscribers to take profits on long positions. Price may continue rising in the face of extreme distribution, especially during periods of fear, so be prepared. Bonds are vulnerable to the downside because the majority is all in right now.
Treasury Bond DI
Using the Matrix
The value of the Matrix is far more than a study of price. Trends are a function of price, volume (force), volatility, and TIME. The order of their importance is as follows: (1) TIME, (2) volatility, (3) volume & price alignment. Volume and price alignment, a setup that triggers action, favors Grade A & B, early cycle markets under high compression (↓COM). ↓COM suggests extremely low volatility, a quiet trend ready to explode into high compression (↑EXP). Weekly and monthly breakout signals are not finalized until the end of the week and month, respectively. Signals generated before that could be temporary. Keep this in mind when reading alignment.
Suggested Reading: The Cycle of Accumulation and Distribution (CAD), Leverage Oscillator (LTLO), Diffusion Index (DI), Volatility Bandwidth (BW), Compression (COM), Expansion (EXP), Alignment, Upside Alignment, Downside Alignment, Sentiment Model, Intermarket Trends, VIX Model, Economic Activity Composite, Long Term Cycles.
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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.