Tuesday, November 16, 2010

Yesterday's Market

Let's start with a look at the IEFS -- the 7-10 year Treasury ETF. Yesterday, prices broke through support (a) on a big gap down (b). The next level of support is at (c). Also note the changing EMA picture: the 10 and 20 day EMAs are moving lower and the 10 has moved below the 50 day EMA. Both of these are negative developments.

The daily chart of the IEF shows that prices are in a clear down (a), up (b) down (c) pattern over the last 10 days.

On the IEF daily chart, the technicals are all negative. Money is flowing out of the market (a and b) and momentum is turning negative (c).

For the TLTs, we see another downtrend (a). For the last 10 days, notice the strength of some of the downward bars (c) -- prices are printing strong downward movement. In addition, the 10, 20 and 50 day EMA are now all moving lower with the shorter EMAs below the longer EMAs (b).

The daily chart of the TLTs shows that technical developments are negative. Money is flowing out of the market (a and b) and momentum is clearly negative (c).

The long end of the Treasury market is clearly selling off now.

Yesterday, stock prices opened slightly higher (a), but then consolidated in a triangle pattern (b) before moving higher (c). Note that prices formed one downward pennant pattern (d). Right after lunch prices broke key support (e) and then moved lower (f), forming two upward consolidation patterns that found resistance at the EMAs (g).