Posted by: stockscooter | April 21, 2012

Treasury Rate Risk

The ten year treasury pegs to mortgage rates.  Because of this importance, it often leads the 30 year treasury bond in significant turns.  Currently, it has turned up off a deep bottom and rates are set to plow upward over the ensuing weeks,,  This should be the talk-of-the-town.  Remember back in the Ides of March, I posted that rates have initiated upward?  Then I said to watch for the head-fake downward, which will shake-out the market.  That is exactly what we saw, to the tee.

What’s the chart saying now, you ask?

-The light blue trend line on the price chart shows upward trend.

-The two yellow circles show the same with my custom trend indicators. They both are trending upward with no crossing of lines.

-The orange circle shows my proprietary Trend Confirmation Mirror Indicator.  This runs opposite the yellow circled trend  indicators.  It is still in the same directional trend, with no crossing to be seen.

-The blue circle shows my first-to-turn strength indicator, turning positive this past week, off of a deep low.  This is most important to watch in the near-term.  It is turning up after a 4 week sell-off.

-The purple circle shows this 4 week  head-fake downward, a possible wave 2, prior to a large wave 3 upthrust.

U.S. Treasuries are the largest market of any security on earth.  Huge amounts of money are about to be made and lost.  The markets will be talking about other events, but the real money being traded will be right here.  If I’m wrong, we will see the trend line violated, to the downside.  However, as long as my first-to-turn indicator stays green, it’s up, up and away!  The equity market sees this, and is selling-off already.

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