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Is Nasdaq Rebounding? Observe US Treasuries As A Leading Indicator.

|Includes: Invesco QQQ ETF (QQQ), TLT

Nasdaq just had a sharp rebound at channel bottom after the free fall since Aug 20th. Looks like the index finds initial support here, but I'll be cautiously checking if this rebound would be similar to the year 2008 one (2008 Mar-Sep), which ultimately breaks the support channel and turned into a bear trend.

US Treasuries yield had been a leading indicator for the last 2 Nasdaq bears (ie year 2000 & 2007). I'll be monitoring if 10 year Treasuries yield stays about 2% or more critically 1.84% which is the arch bottom of a possible trend reversal of the yield bear trend since year 1981. (Deflation signs are not supportive of such a trend reversal)

Chart 1:

Candle chart plotting Nasdaq, in a regression trend with band-width of 2 standard deviations on each side.

Red line plotting 10 year US Treasuries yield.

10 year US Treasury Yield leads Nasdaq tops

Chart 2:

Red line plotting 10 year US Treasuries yield, in a regression trend with band-width of 1 standard deviations on each side. Green Arch showing support levels to stay for a possible trend reversal of the yield bear trend since year 1981.

10 Year Treasuries yield

Disclosure: I am/we are long CORPORATE BONDS.