<Weekly Analysis No. 2> TMF continues to decline... What is causing the resistance at the upper limit?
※In this section, we will conduct a comprehensive analysis by performing a multi-faceted technical evaluation. Additionally, the evaluation will be done based on a scale of "5 (buy) - 1 (sell)."
Technical analysis (overall rating: 1.83/5)
Points
・From a chart pattern perspective, it may be considered as an extension of the downtrend. Concerns about Dow Theory include worries about upward deviations in "inflation-related indicators / employment statistics-related indicators" (As risk assets such as stocks are rising, the market does not seem to be too concerned about it?) Regarding 2 and 3, no changes from last week, as the rise in the 10-year bond yield is likely to remain a major factor causing rapid declines in the short term, putting pressure on the price.
・The downward momentum is expected to continue in the medium to long term. The most important recent goal is likely to be the breakthrough of the 200-day moving average. The volume itself was biased towards a decline this week, so it is likely that the volume will increase (it is unclear whether it is selling/buying volume).
・It seems likely to enter a long-term downtrend. However, there are slight indications of a reversal in the short-term trend.
・The bond market continues to be cold due to fear. However, looking at the RSI, has the fear diminished slightly? Fear is expected to continue, but if the RSI has calmed down, it may be considered a buying point.
☆Market Sentiment (rating: 2.25/5)
* Analyzing the rough development using a typical chart pattern for market sentiment.
- Chart pattern (3/5)
- The first half of the week shows a candlestick chart with a long upper wick, while the second half of the week has no wick and a longer lower wick. It results in negating the August increase significantly, crossing the shoulder part of the Head and Shoulders pattern. Upon detailed examination, both Elliott wave "impulse 5 waves, corrective 3 waves" can be confirmed.
- Dow Theory (1.5/5)
The downward trend material is still unable to surpass "② Soft landing expectations → Hard landing concerns" and continues to decline. Currently, in addition to last week's "① Soft landing expectations → Hard landing concerns" and "② Negative impression of the interest rate cut width", the situation became even more difficult with the addition of "③ Rapid rise in US 10-year bond yield due to soaring crude oil prices", making further rise challenging.
From a chart pattern perspective, it can be considered as an extension of the downward trend. Concerns regarding Dow Theory ①: Concerns about "inflation-based indicators/employment statistics indicators" due to the upside surprise (the market does not seem too worried as risk assets such as stocks are rising?).Regarding ②③, similar to last week, the rise in 10-year bond yields is likely to be a major factor in the short-term rapid decline, thereby exerting pressure on the upside.
☆ Trading Timing (Rating: 1.5/5)
* Analyzing selling or buying timing by combining moving averages and volume.
- Moving average line (1/5)
The candlestick chart fell below the 200-day moving average line. Death cross occurred with 5/200-day moving average line and 21/50-day moving average line.
- Volume moving average (2/5)
It is likely that a death cross will occur on the short-term/medium-term moving average lines. The volume itself has more selling volume, and the volume itself is decreasing.
The downward momentum is likely to continue in the medium to long term. The most important recent goal will be to break through the 200-day moving average line. Since the volume itself leaned lower this week, the volume itself is likely to increase (unknown if it is selling/buying volume).
- Trend (Rating: 1.75/5)
I will analyze the medium to long-term upward and downward trends.
・Ichimoku Kinko Hyo (1.5/5)
"By the bearish candlestick shadow reaching the Lagging Span, a role reversal is in progress. Based on seeing that the Conversion Line is crossing below the Base Line and the candlestick is breaking below the cloud, a triple role reversal seems imminent."
・DMI (2/5)
PDI is flat / MDI・ADX rising accelerates the downtrend. However, recently MDI/ADX have crossed at a high level and MDI is slightly declining.
→It seems likely to enter a medium- to long-term downtrend.However, there is a slight indication of a reversal in the short-term trend.
☆Overbought (Rating: 0.83/5)
Analyzing the overheating feeling from levels of being overbought.
・BOLL(0.5/5)
Expanding along -3σ since last weekend.
・RSI(1/5)
A sharp decline from around 30 to 25 in the latter half of the week. The momentum of the decline seems to be calming down compared to last week.
・MACD(1/5)
Continued decline from the high range. No indication of a golden cross occurrence.
The bond market continues to cool down due to fear.However, has the fear slightly diminished based on RSI? Although the fear seems to persist, if the RSI is stabilizing, it might be considered as a buying point.
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ぴるさん OP : Supplement
Concerning the '3. Rapid increase in yields of the USA 10-year bonds due to high crude oil prices' in the Dow theory, I think the market is somewhat satisfied with the USA economic indicators, with the points of 'Rising before CPI, employment statistics, PPI announcements' and 'Falling after CPI, employment statistics, PPI announcements'. In that case, the focus seems to be shifting towards the concern of 'rising crude oil prices' (while also considering concerns about the USA economic indicators). Indeed, it can be observed that the yield of the 10-year bonds has risen sharply since the US government imposed economic sanctions on crude oil products to Iran.USA announces additional sanctions against Iran - after ballistic missile attack on Israel