Spanish Bonds
Just Yesterday I discussed Spanish stock indices and the impending 3rd wave. Now this would appear contrary that simultaneously bonds yields are not falling but crashing. The commitment to stimulate is not being taken well by the stock market indices as much as by the bond markets. In other words either people are buying these bonds in a massive risk off, or they think anything out of 'Draghi's' mouth is QE in some form. The expectation that new money will go
into equities only might not be what the market is thinking anymore, and buying bonds. As bond markets ar the biggest risk and need to be saved. If at all the money was to chase a low lying fruit why not commodities whose prices are deep down. But that does not always happen when the dollar goes up. And all the QE talk does is only beat up the Euro in favor of the dollar.
Anyway this chart of Spanish bonds shows a triangle formed last year and then we broke down. At that time I thought that breakout was bullish but it only ended wave 4, as 4th waves are triangles, that precede the final move. So this big move down is wave 5 and the last time these bonds fall. Once they bottom it should be a major long term bottom. But we have to wait for an actual price reversal to confirm that has happened. The triangle has given it away. Also
note that the news cast yesterday follows the decline in yields after months, as markets anticipate in advance. News is never the reason to be reactive, by that time it is always too late.
