Sell Short US Notes Now

The 10-year US note is entering one of its most bearish periods in any year as we can see in the histogram below. Between March 17^th and 27^th, price has fallen about 85% of the time since 1982. The 16^th, yesterday, has traditionally been the strongest day in March.

This cycle is static in the sense that it does not change much. The cycles based upon the current price movements are dynamic and are more changeable. Both these weekly and the monthly cycles are falling and bottom at the end of March. The 25^th is likely to be the low for this move.

The market has been so weak that the drop has run right through some red lights. Note that the notes have already fallen in the first half of March which has been the stronger part of the month. This decline has occurred despite sentiment readings that show many bond bears. Sentiment measures are contrary indicators. Too many bears typically lead to rallies in a bull market. But, in a bear market, the bears are correct. A high level of bearishness plus falling prices are the norm for a bear market.

The only question is how low will price fall. The 123.6 level is a 78.6% retracement of the prior 2018-2020 rally.

March Daily Price Histogram for March

Blue: Average Percentage Change

Red: Probability of a rise on that day

Green: Expected Return (Product of the first 2)

Notes Monthly Cycle