Bonds broke out to a higher high on Friday. Tuesday saw bonds form a swing high.
The question is are bonds merely setting the daily cycle trend line before one more push higher or are bonds rolling over?
AS we discussed in the Weekend Report, August is month 8 for the yearly bond cycle and bonds printed a higher high. Bonds will enter the timing band for a yearly cycle low in September. Allowing for the conclusion of the current weekly cycle would take bonds out about October or early November. Which would be months 10 and 11. That would place bonds right in the timing band for their yearly cycle low.
A failed intermediate cycle is required for the yearly cycle decline. Left translated, failed weekly cycles typically peak on or before week 8. The current intermediate cycle peak is week 5 and this is week 6. A break below 113.68 forms a weekly swing high and likely will signal the intermediate cycle decline.
Which brings us to today.
As was mentioned earlier, bonds printed a higher high on Friday. That higher high reversed intraday and printed a bearish reversal. Bonds not only formed a swing high today but also broke below the developing daily cycle trend line.
The cyclical framework has aligned in such a way that a failed daily cycle should lead to a left translated weekly cycle which will result in a yearly cycle decline. A break below the previous daily cycle low of 113.05 forms a failed daily cycle and sets this all in motion.