Tuesday, March 30, 2010

Treasury Tuesdays

First, remember that Treasury prices are at the far side of a head and shoulders formation.

A.) In the last week, we've seen prices move strongly lower. First, note the gaps, indicating a serious change in the supply/demand equation. In addition,

B.) Prices are forming a possible price island below the neck line of the head and shoulders pattern.

The daily, 5-minute chart shows the price action in more detail. First, we see the gaps power at points A and B. Next,

Notice that prices have found upside resistance at the 50% Fibonacci level.