Stock market decline may cause bond market recovery

Gregor Horvat Wavetraders

Stocks are slowing down and we see NASDAQ100 trading in a higher degree (A)-(B)-(C) corrective decline that can the price back to 14800 – 14200 support area before the uptrend for wave 5 of (3) resumes.

The main reason for a stock market slow down are treasury bonds. 10Y US Notes is right now sitting at potential support area for wave (B) that can cause bigger recovery for wave (C), which can easily push stocks into lower supports.

As you can see in an overlay chart, there’s a clear negative correlation between NASDAQ100 and 10Y US NOTES, where wave (C) of an (A)-(B)-(C) reversal can be now underway.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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