Wednesday, January 7, 2015

No Better Way to Mark JGB Yield Low

There is room for a bearish correction in JGB as a technical development is forming after steadily advancing prices since mid-November.  The advance since mid-November carried JBH5 nearly 2.5 points higher to yesterday’s high.  Today’s (Jan 8) lower open has created a possible three session ‘three rivers bearish reverse’.  This is somewhat consistent with the ‘western style’ ‘island top’, but importantly does not require any ‘windows’ (gaps) to be filled before lower prices can come. 

We should note that today’s price action is not complete and there is room for the ‘window’ currently open between yesterday’s low (148.04) and today’s high (148.02) could be closed.  However, in order to discount the bearish implications of this bearish reversal, a settle above yesterday’s opening level of 148.10 would be required. 

Finally, we would note that the technical condition in global long rates is considerably stretched across borders and very recent price and positioning analysis leads to rather strong convictions about expected forthcoming price concessions in most developed nations.  


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