The IEFs are in a very interesting place right now. First, consider (a), when prices first broke through major support. The 10 day EMA moved below the 20 day EMA and prices eventually found support at the 50 day EMA. Now we have the 10 day EMA below the 20 day EMA (b), but prices closed below the 50 day EMA, printing a strong bar. This might now be enough to send prices significantly lower, but it does indicate a major change may be in order for the Treasury market.
Yesterday, the primary action in the Treasury market happened at the open with the big drop down (a). Prices moved sideways until early afternoon, when they dropped though support (b) and then consolidated near the lows of the day (c).
However, consider this in light of the Fed's discussion about buying Treasury bonds. Fundamentally, there is a pretty strong bid coming into the market, which should keep prices from collapsing or falling too far.
Notice that the dollar has seen prices cluster around the 10 and 20 day EMAs (a) on high volume (b). These are signs of a selling climax -- high volume and a lack of major downward price moves accompanying the high volume.
Remember that the dollar and commodities in general have an inverse relationship:
If we start to see a dollar rally -- even if it is a counter trend rally -- it would take some of the upward pressure off of commodities.
Yesterday, stock prices opened lower (a) and rallied, but hit upward resistance at the previous days close (b and c). Prices fell to Fibonacci levels and rallied, this time again to the previous days close.
Oil is still hitting resistance in the 84//bbl area (A). Prices have fallen to the 50 day EMA for support, but the MACD has given a sell signal indicating downward pressure is part of the current trade.
