Potential Interest rate inflection/reversal point

Conditions at (1).Right Shoulder of a bullish inverse head & shoulders patterns. Sentiment Many were bearish yields.
Suggested plan of action.Shared that interest Rates were ready to blast off (see post here)
ResultsBonds got creamed in the following 7 months, end results, largest 18-month rally in
yields in the past 30-years. This rally was 70% greater than the 7 largest 18 months rallies over
past 30-years.
Conditions at (2)Resistance was in play. Largest 18-month rally in yields in 30-years had just
taken place. 100% of economist were calling for higher rates.
Suggested Plan of actionShort yields/Buy bonds Share this on 12/9/13 with members (see
post here)
Results TLT rallies 23% in 2014, beats S&Ps return by 10%.
When suggesting these interest rate trades I NEVER mentioned ONCE, that these ideas were
due to QE moves to come or Inflation/Deflation. I believe I left BIAS at the door on these ideas.
Due me a BIG favor when looking at current conditions.Take of your bias hat if you have one!

Conditions at (3)
One of the largest 52 week declines in rates in 30-years.
Dual support looks to be in play.
76% Bond bulls (see below)
Huge Bullish wicks at dual support @ channel bottom
Momentum deeply oversold
Yields at 23% Fib support
Deflation admission hits the front pages in Europe
Fewest number of investors bullish commodities in years
30-Year yields at triple support
10-year yield could be at the right shoulder of a bullish inverse H&S pattern.

For something like this to hit the front pages, it could be long in the tooth.

Market did not believe deflation was a concern back in May (see commodity chart above, tons
of commodity bulls) and they were WRONG (oil has collapsed). The majority was big time on
the wrong side of the deflation theme.
Now its a crowded trade the other way (fewest commodity bulls in 6-years), as the world is
much more concerned about deflation now, as its front page news. Wrong side of the trade
again???

I shared on the first page that none of my prior suggestions had anything to due
with big picture thoughts. They were based upon the Power of the Pattern being
at extremes along with price movement and sentiment being at extremes as well.
Did I get lucky calling the low in yields in May of 2013 and the high in yield in
January of 2014? For sure luck was involved, a good deal of prayer and some hard
work went into the formula as well. That is now in the past.
Currently status/Bottom line Price points (support), rate of change (big move
past 12 months) and sentiment (almost 80% bulls) are at levels where rates could
pull a reversal.
The plays now would be If long bonds/slow money investor in them, either
harvest some here or make your stops tight. If you are a swing trader, be looking
to short bonds/long yields here. ETFs to own TBF (1x inverse bond) I wont
suggest this ETF, if you are aggressive TBT is a play (2x inverse)
Again, NONE of this has to do with any other asset class or the idea that I know
where in the heck the big picture is heading (above my pay grade). I attempt to
find tops and bottoms in different asset classes and this is what I am attempting
here!
Cool part of this trade If wrong, the stop is tight, due to yields being on support.

Best Regards,
Chris Kimble
Kimble Charting Solutions

Kimble Charting Solutions (blog)

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