High and rising interest rates are usually bad for the stock market. Twenty year treasury bond rates have begun to rise during the past few months (thus, TMV, the 20 yr Treasury 3x Short ETF has been rising). When the $RUT acutely falls, investors run to bonds which causes TMV to fall. This effect seems transient. Conversely, when the $RUT begins to rise, bond money outflow causes TMV to transiently fall. After each $RUT-induced TMV reversal, the $RUT and TMV go their merry ways. This suggests that TMV whipsaws (consolidation) are associated with $RUT short term reversals. In the 2nd chart (TMV equivolume), the $RUT drop occurred during the tail end of the TMV breakout from the TMV CCI-based consolidative equivolume rectangle. TMV recovered the $RUT's negative impact in order to finish the TMV upleg. As soon as the $RUT reversed its course to the upside, the TMV Upleg ended and TMV went into a consolidative equivolume rectangle. TMV ultimately emerged for a new breakout.
The 3rd chart (TNA equivolume), includes the TMV equivolume consolidative rectangles, but also has the TNA equivolume consolidative rectangles. The TNA rectangles lead into the TMV rectangles and are associated with the $RUT falling then rising. The third TNA rectangle (solid brown lines) is different than the others.
The 3rd & 4th charts suggest that the euro drives oil, gold & the $RUT which drives the long term bond market. Oil has finished up its 3rd consolidative rectangle and is now in its 4th rectangle.
The $RUT finally broke the Ascending Triangle and Bump & Run Trendlines (see 1st chart), but POMO is expecting v of Wave 5. Speculation: A new consolidation in Oil leads a quick Wave 5 completion via a Busted TNA Equivolume Rectangle. A nice long TMV Upleg occurs.
Blue Grey Tanager, Arenal, CR 12/10
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