Bund/UST Spread-Narrowing Risks Mount; DeMark 9 and 13 Flagged
Source: BFW (Bloomberg First Word)
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UUID: 7947283
(Bloomberg) -- Bund/UST 10Y spread facing heightened risks of tactical compression toward 193bps at minimum, as it corrects from 20-year wide levels today; DeMark exhaustion numbers diminish current reward-to-risk for further widening, Bloomberg technical analyst Sejul Gokal writes.
Alert: HALISTER1- See chart here; spread at 204bps vs 208bps earlier today, which was widest in over 20 years
- With momentum stretched and today’s TD perfected setup (which argues for narrower spread in near term), scope for further immediate widening remains limited
- MACD histogram most negative since Feb. 2015, when such readings anticipated the correction in spread dislocation
- Spread compression levels in focus at 196-194bps, 190bps, 187bps; TD Risk level indicated at 216bps
- NOTE: Foreign real money accounts seen fading today’s widening move: MORE
- NOTE: Sejul Gokal is a technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice
Source: BFW (Bloomberg First Word)
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UUID: 7947283