Tuesday, February 26, 2008

Is the Treasury Rally Over?

While the short-term and mid-term (7-10) year Treasury markets are still firmly in a rally, the longer-term chart (20+ years) is showing a clear break.

First, the one year chart shows a clear break of the uptrend.

But looking closer at the chart notice

-- Prices gapped down through the trend line.

-- Prices rose to the trend line

-- Prices have since retreated.

For this to be a clear trend break this trend will have to continue with the TLTs making a strong move below the 90.50 area.