The enclosed comparison chart supports my sense that the banks in general, and Bank of America (BAC) in particular, are sensitive to the recent shift in the shape of the yield curve. In a loose sort of way, the patterns between the ProShares UltraShort 20+ Year Treasury (TBT) and BAC exhibit some pattern similarity. Certainly, the April-August downtrends paralleled closely, which represented a relentless decline in longer-term interest rates (TBT) concurrent with the declining price of BAC.

Since mid-August, the TBT has carved out a 3-month bottom pattern that appears to be breaking out to the upside, reflecting a climb in longer-term interest rates. For the past three weeks, BAC has rallied sharply, perhaps in reaction to better business propects for BAC implied by a steepening yield curve.

To really get some upside traction, BAC needs to hurdle and sustain above 13.00/05.

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 specific industries and international regions.

© 2002-2010 MPTrader.com, an AdviceTrade publication. All rights reserved. Any publication, distribution, retransmission or reproduction of information or data contained on this Web site without written consent from MPTrader is prohibited. See our disclaimer.

Mike Paulenoff Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.