Here is the only cycle I follow in bonds ( other than Docs cycles via subscription) because it is a simple static cycle and other than some muting in the mid-nineties is again gaining resonance and quite predictable.

Anyway not the time to enter bond funds for the next 5 months, should get a test of resistance up at 5 1/2. I have used this to time adding money to bond funds and it has worked very well for a nice kick start.
I have never tried shorting them, i.e. Juno.

Hank

thanks for the indicator. very helpful.

Longer term interest rates have so far defied this 40 week cycle upturn...
Here are some other interesting charts I track and the only comment from me about this whole RE bubble talk.
I would not even consider selling my home until median sales prices at least stall for a year...for now they are going parabolic and we have not seen this rate of annual appreciation (>7%) since the early 1970's...
2004 national ave was 8%...
These levels also began happening in the early 70's but CONTINUED to go up with the 74-81 period showing double digit price appreciation DESPITE ROCKETING MORTGAGE RATES.

DEFLATION CROWD BE WARNED this has likely not even begun to get into what has historically been blow off mode and if it is anything analagous to the 2000 Nasdaq, well, it has much further to go.

I will start posting these more regularly for bond timing.
My original post in December was looking for a Sell signal.
Sure enough it occurred and it looks like the 40 week cycle has kicked in.

Hank

Forgot to update this lately:

Bonds on a BUY signal since late April...
40 week cycle topping...

I closed my RYJUX position at a small loss

Bonds remain on BUY...sitting right at the LT regression line now...
Has not precipitated a another refi boom yet...
These persistant low rates have been the biggest surprise to me in these markets

On track to beat last years 12% rise...

Don't try to pick the top in this "Housdaq"

Bonds remain on BUY...below important resistance and the 40 week cycle is early in it's down phase...I don't expect rates will go up until late Summer/Fall.

MrHanky, how do you mentally reconcile your bearish view of the stock market (Cube trader thread) and a somewhat bullish view of the housing market?
Thanks in advance.

Housing continued to appreciate all during the 60-82 bear market.
But currently we have a strange brew going on with commodity inflation due to China's exploding demand for resources, yet there seems to be strange deflationary forces at work from the relative cheapness of all the resulting imported goods and stagnant job and wage growth in the US and EU during this global expansion. Our FED has stimulated an industrial boom in Asia and a consumption binge (especially in housing and related industries) here at home and helped keep Japan and EU afloat. How sustainable this arrangement will be nobody can know for sure but so far its working but lately signs of stress are showing up that trouble may be on the horizon. I follow docs cycle work and some of my own. The 4 year cycle is one of the most reliable and it has no doubt now peaked and will bottom in 2006. I expect we will see some type of recession late this year but definitely in 2006. This time strong housing and autos will doubtful help pull us through so it could be the start of a larger problem. The Fed can pull this same thing off one more time possibly(plunging ST rates but this time it will not be so easy to utter from forked tongue "we too support a strong dollar") and EW experts such as Glen Neely do not see this upcoming recession or resulting stock market fall to be "the big one" It will come the next cycle (2010) when many factors finally take there dastardly toll including much higher energy costs forcing radical changes in our current glutenous consumption and wasteful habits. Global warming will also continue to increasingly create havoc with our weather patterns as China has quickly accelerated to the number 2 contributer of CO2 and will soon surpass the US. I feel housing will remain soft in the 2006 cycle as rates are again plunged and the dollar follows but building costs will continue to climb and help elevate prices. The 2010 cycle will likely be the BIG BUST in many ways...at least I am hoping not until then, I need a bit more time to get my retirement nestegg and other depression proofing in order.

OK the picture in Hanky's crystal ball is now fading

4 year cycle tops tend towards right translation (I think due to FED stimulation when the bottom - recession strikes) but bottoms occur like clockwork.

Bond Timing Model issues a SELL

Bonds remain on SELL despite this little move down in yield...
40 week cycle bottoming and should put additional pressure on rates to continue climbing...in the meantime housing and retail showing definite signs of
weakening.

Everything in place for a surge in rates:

RAFF on sell
and
40 week cycle bottom

Rates continue to climb and now at an important S/R area!

Bond remain on SELL

Don't think I have shown this little tool.
Unmistakable link of SP to interest rate movements.
We are on LT sell here even though the HOM and CT
have us long for now, need to remain cautious on the big
picture.

Bonds remain on a SELL, this appears to be a just a small PB in a larger trend of increasing rates.
The SP-Bond model is on a SELL BUT typically there is quite a delay from the signal to the market succumbing. But there is a strong correlation here and lately I have seen a remarkable chart of TNX and NIKKME with almost perfect correlation.

TNX continues on a SELL despite the last several weeks of choppy downward movement. 40 week cycle also not favorable to bonds yet.
Also we have recently developed an inversion in the middle of the yield curve.
In 2000 before the recession and big bear ensued we had an inversion and it started at the long end first. Something to make note of here.
Also the FED FUNDS is retraced .5 of the way from where it started at 6.5%
Some increase in quality spreads but nothing too notable.

Anyway we seem to be developing some undesirable characteristics here but no big red flags ....yet...

Rates continue to work their way up despite the 40 week cycle having topped and show no sign of reversing here at all.
I have included a very long term chart of the 10 year note and there is very
significant resistance right at about 5% A meaningful surge above this and RSI re-entering the bear market range would be highly indicative of a major long term shift in bonds. Already the last reaction high exhibited no reversal signal and this usually indicates a trend has exhausted.
Even with this mild increase in mortgage rates their is rapidly mounting evidence the housing market has begun deflating and the RE fall is spreading.
Most all of the home builder stocks are steeply off their highs of mid 2005.
I see what appears as several large downsloping head and shoulders patterns that need to be watched closely as another precursor to a more severe collapse.

Roof Collapses on Housing Boom

Hank

Continuing to STAY OUT OF BONDS as rates continue on a steady climb