Thursday, June 27, 2013

The Treasury Market Sell-Off in Perspective

Let's take a step back and put the recent market action into perspective by looking at the weekly charts.


Both the IEIs (5-7 year) and IEFs (7-10 year) have similar charts, with perhaps the biggest feature the declining MACDs, which have been moving lower for about a year each.  Also of importance are the weakening CMF readings displayed on both charts.  Finally, both charts broke through key supprt levels during the recent sell-off (for the IEIs it was 122 and IEF it was 105).

Right now, the key line of support for both is the top Fib fan.





The TLHs (top chart, 10-20 years) and TLTs (bottom chart, 20+ years) have very similar structures.  Both broke support in the recent sell-off, but both have support from either a Fib level (TLHs, top chart) or a previous price level (TLTs, bottom chart).  One of the main features of both charts is the declining MACD which has been falling for the last year.