Tuesday, August 26, 2008

Treasury Tuesdays


Let's look at the macro-picture to see where we are in the cycle. The IEF (7-10 year Treasury) started to rally at the end of last summer in reaction to the credit crunch starting -- traders/investors were looking for a safe place to put their money. The IEF rallied until the Fed back-stopped the Bear Stearns deal. Then traders realized the Fed would be extremely active and as a result Treasuries were less attractive. Treasuries sold-off until the end of June.


Which brings us to the three month chart. Notice th following:

-- Prices are above the 200 day SMA

-- The 10 and 20 day SMA have crossed over the 200 day SMA

-- The 10, 20, and 50 day SMA are all moving higher

-- Prices have moved through previous upside resistance.

This is looking like a market that wants to rally.