SAMT Blog
Defensive assets are topping out, for now
02. October 2019, by SAMT Guest
Technical Analysis
The last 12 months have seen an aggressive rally on defensive assets, fueled by many geopolitical risks (Trade War, Iran, US Impeachment attempts, Brexit, …) as well as a slowdown in global growth. We believe the risk/reward is now stretched on these Defensive assets, such as Treasuries or Gold, while cyclicity to make a come back towards year-end and early 2020.
picture 1: US 10 years Treasury yields (Weekly graph or the perspective over the next 2 to 4 months)
It’s now been a year since Treasury yields topped out in October 2018. The sell-off has been impressive and is now pointing to our I Impulsive targets to the downside (right-hand scale) in the 1.3 – 0.7% range. Theoretically, these could be achieved over the next 12 to 18 months. In the meantime however, and considering the speed and scope of the recent move down, we believe that Treasury yields could be due for a counter-trend rebound. Indeed, both our oscillator series (lower and upper rectangles) are pointing towards an intermediate low between now and mid/late October. The bounce that could follow may last b...
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