TMF has lost support below the light blue trendline, and is starting to form a bullish rebound. There was a bullish gap higher today and TMF is trading near the light blue trendline again with this support line now acting as resistance around $48.30. I think this rebound is caused by US bonds rebounding after becoming oversold from the Trump election rally. Trump’s victory has led to a strong risk-on environment where traders and investors are willing to take much riskier trades such as crypto and tech stocks instead of investing in less risky bonds and commodities. For now I would pay attention to the risk environment especially with so many macro factors like war tensions and the weakening US labor market. If investors start becoming defensive they will exit crypto and tech stocks to rush into US bonds and commodities.

10 year bond yields have reached my yellow trendline target, peaking around 4.48%. We can see bond yields are starting to trend down, which helps bond prices rally. This was a key point discussed in my last update.

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