As is detailed in the chart above we have seen a bullish false break lower in the Bund on a daily chart and a reversal pattern has formed. A break over 120.00 will trigger further gains towards 122.00 and possibly higher. I have also shown the Dax in the lower portion of the screen to highlight the general inverse relationship. So, with that in mind, could the movement in fixed income be signalling the end of the bull run in stocks? For further thoughts on the links between bonds and stocks take a look here. Also, as an after thought, the Dax has broken out of a well defined bullish channel to the downside......
Very well written piece.
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