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.
Note the Inverse Head and Shoulders formed by the '80 , '81, and '84 lows.
Active Month 


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Note the 100 day MA crossing under the 200 day.
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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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