Bond Technical Strategy – Weekly by Lloyds TSB

The downward trends in equity markets have now reached and breached significant support points from a long term perspective.

The downward trends in equity markets have now reached and breached significant support points from a long term perspective. Whilst this implies a continuation from a long term perspective, there is increasing scope for a corrective bounce in stocks in the context of a bear market rally. This is purely seen as an interim bounce/ consolidation rather than a major trend change. Throughout the past few weeks, bond yields, as expected, have remained resilient to downward pressure. This is normally a sign of accumulation and hence any potential bounce in equities should resume the downward
bond trends.

It is clear the markets are thin and volatile hence a flexible strategy is constantly maintained, but as gold eases from an short term overbought condition and oil starts to exhibit basing signals, safe haven demand is starting to ease.

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