Tuesday June 25, 2013
Let's take a look at the bond market. Recall my warning that once this market breaks to higher yields it rarely looks back.
30 Yr Yield Weekly Chart
The two green rectangles are symmetrical as to price and time. At left, the last half o 2011. At right the last half or 2013. Price has already started back pu at the same angle of descent in 2011. Can rates reach 4.5% by Fall, I expect so. That will hammer stocks lower; commodities are already in a tailspin.
Lower gold prices and higher bond yields are signalling trouble ahead. Lower metals prices from copper to iron ore are suggesting a world wide economic slow down. Higher bond yields are both a return to normalcy and a warning of a credit crunch ahead.
The red outline at top right is a reasonable target zone for rates this year. Ben thoght he was in charge, the market is in charge now.
Markets are recovering from the severe recent sell off. There is some evidence that we are at an intermediate low in bond and stock prices.
UUP 2 Hour Chart
ON the two hour chart the US Dollar is rather overbought, that is helping stock prices this morning as the Dollar should at least slow its advance here.
Crude Oil Two Hour Chart
This weekend we reminded readers that crude oil was the market to watch. It hit a low on the two hour chart and is off and running this morning. It is bouncing off its lower channel line.
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