So You Want To Be A Bond Market Bull?

April 19, 2016 | Taylor Letterman

After watching the Tuesday morning trade, in my mind nothing has changed…With the exception of course that the bond market (ZBM) is almost a full point lower from Monday’s close. As anticipated, the Europeans passed the bearish treasury baton over to the Yanks and for two consecutive days the Yanks did not disappoint.

I would like to see this German Bund trade and close below 16300. As we speak it has a low of 16309.

I am looking for Wall Street to continue its March higher. Today’s rally is being led by the Blue Chips. I prefer when Nasdaq 100 (NDX) leads. It doesn’t matter. NDX has been the laggard all year…just like the Bourses in the Far East and Europe have lagged behind Wall Street. Due to the fact the Bourses in the Far East and Europe are undervalued, they will continue to rally providing Wall Street with an underlying overnight bid.

I am thinking a Tuesday afternoon bid which takes the E-mini S&P 500 (ESM) above 2100.00 will not quit until we see 2110.25. As good as things are shaping up, I think we could see a retest of the 2132.25 highs in ESM by the end of the month. And if that is the case, we will see a 159 handle in ZBM well in advance of new all-time highs on Wall Street.

Be a Bull ZBM

These bonds are grotesquely overvalued due to “flight to quality” and “the world is coming to an end” buyers who are quickly becoming long and wrong the bond market. The only question now is, “How much pain can they take before they realize the world is not coming to an end?”  And, that “America is back to work. The great economic engine called the U.S. Economy is back.”

Here comes inflation and here comes the Gold market.

Get more of Tony LaPorta’s timely market analysis, daily commentary, and actionable trade recommendations at Simpler Futures.