Tuesday, November 17, 2009

Treasury Tuesdays

All charts are of the IEF -- the 7-10 year Treasury ETF.

Click on all charts for a larger image.

In general, the IEFs were in a downward sloping flag pattern for the last ~month. Also notice the lack of overall firm direction over the last 6 months; there is no firm trend in either direction. Instead there are really four moves: up, down, up then down. This tells us there is no overall trend in place.

A.) Prices broke through the downward sloping trend line and the 200 day EMA.

B.) Note the reversal in the EMAs -- all have turned upward. While the orientation of all three is still negative -- that is, the smaller is still below the longer etc... -- the movement is bullish. Also note that prices are above the EMAs which will contribute to this trend continuing.

A.) The MACD has given a buy signal.

B.) The accumulation/distribution line has been moving upward for the last 4 months. That tells us that despite the lack of overall direction, the overall tendency has been for people to accumulate Treasury's. That's especially interesting considering the stock market has rallied strongly over that period and the Treasury is issuing boatloads of debt. In other words, there is still a strong, fundamental long-term demand for Treasuries right now.