Triangle On Treasuries Suggests Limited Upside On Stocks

2019년 2월 17일

Hello traders!
Today we will talk about treasuries (10year US Notes) and stocks (S&P500).

Well, as you may already know, treasuries and stocks are more or less in negative correlation and what we have noticed that 10y US Notes can be forming a big bullish triangle, while S&P500 can be finally finishing a five-wave rally from lows.
In EW theory, triangles are usually continuation patterns, so seems like treasuries can be headed higher, which means that stocks can see limited upside, especially now when we can clearly see five waves up from lows and according to EW rules, after every five waves, a three-wave pullback follows!

That said, if we are right, then ideal scenario would be a rally into the final wave "v" on treasuries, while stocks may see a deeper a-b-c correction! So, be aware of a potential sell-off and risk-off mode on stocks.

Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.