Confusing Bond Markets

WEEKLY UK GILT CONTINUATION CHART

The UK Gilt chart over the two year period since October 2007 shows a steep rally then the market ranging for the last year.

The Double failure at the old all-time-high from 2003 is an unquestionably bearish context.

But the market’s difficulty in penetrating back down beneath the Prior High support – which is the lower boundary of the trading range - is clear.

The possible bull channel since June of this year is interesting, and may be a continuation pattern in the making, but that remains conjecture for the moment.

WEEKLY BUND CONTINUATION CHART

The shape of the Bund chart follows that of the Gilt though the parameters of the trading range since last October have been derived from Highs and Lows that have arose at different times.

The clear double failure at the old all-time-high sets the tone of bearishness

But medium-term there is less of a bull channel that has been created – more of a tight trading range.

And the market remains squarely within a wider trading range.

WEEKLY TNOTE CONTINUAITON CHART

The US market only bears comparison with the European markets since the beginning of 2009.

After that all three markets have followed each other closely.

The double failure at the old all-time-highs is there as in the other markets.

And most recently still, the US has closely matched the bull channel of the UK Gilt market.

But that shows no sign of completing yet.

Traders might well be intrigued by the future possibility of the formation of a second shoulder to a large Head and Shoulders Top formation…but that too is conjecture for the moment.