Wednesday, February 2, 2011

Long Bond

The 30 Yr has about as ugly a chart pattern as I've seen.
The Head and Shoulders set up is on a diagonal and reminds me of the historic bottom of '82, an inverse diagonal Head and Shoulders.
 Historic
Note the Inverse Head and Shoulders formed by the '80 , '81, and '84 lows.
Active Month 

Weekly

Daily
click to enlarge
Note the 100 day MA crossing under the 200 day.
Hourly
click to enlarge
Just penetrated the support trend line of the 6 week long consolidation. While another retest of the top of the range is possible, failure to exceed a Fib retrace followed by new lows would be extremely negative. 
Using the neckline break measuring rule of a target equal to the distance from the head to the neckline, yields a catastrophic 85.

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