You will come across specific terms in these notes (FLD, VTL, and so on). Rather than explain them each time, you will find definitions here: guidance notes for Hurst cycles terminology.
10 year Notes – falling into a pro trend 20 day cycle trough.
The extreme volatility that followed yesterday’s 50bps rate cut in the US appears to be stabilising near term. 10 Year Notes passed through a high 80 day cycle trough at the beginning of the month and took off briskly as befits a pro trend 80 day cycle start up.
Yesterday’s down cross of the 20 day FLD confirms that the recent peak was that of a 20 day cycle and we are now very close to a 20 day cycle trough. We expect this around the intersection of the 40 day FLD and 20 day up-sloping VTL.
Because the longer cycle is still up we are therefore viewing the sharp drop as a shake out and expect the uptrend to resume from next week probably. 10 Year Notes is a good bellwether for the rest of the macro complex and a resumption of the rally implies, among a raft of other things, US Dollar and USDJPY down, copper and oil up, and obviously US yields down.
This post was first published on Hurst Cycles Notes.
