Spike High for Treasuries
Interest-Rates / US Bonds Aug 25, 2010 - 12:39 PM GMTBy: Mike_Paulenoff
Based on my near- and intermediate-term work, the patter and momentum configuration in the iShares Barclays 20+ Yr Treas Bond ETF (TLT) argue that the price structure hit a spike high this morning at 109.50, reflecting the flight to safety surge in buying of US Treasury paper despite the puny yields.
While this morning's high might represent the first of multiple "high-spikes" in the 109-110 area, I am willing to take a small, initial countertrend position long the ProShares UltraShort 20+ Year Treas Bond ETF (TBT). That said, to get preliminary confirmation that a meaningful high in the TLTs has been established, the price structure needs to violate and sustain beneath 107.50.
From a yield perspective, taking a shot at a countertrend position in the TBT's has technical justification. The most recent round of ugly U.S. economic data has pressed the 10-year yield to a new multi-month low at 2.42%, which satisfies the measured downside target off of the 10-month top pattern that broke down at the beginning of July 2010.
Sign up for a free 15-day trial to Mike's ETF & Stock Trading Diary today.
By Mike Paulenoff
Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and s
Mike Paulenoff Archive |
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.
