Tuesday, December 2, 2008

Treasury Tuesdays


Prices have spiked above the upper trend lined of a year-long consolidation pattern. This indicates the credit crunch is still very much alive as traders seek-out investments that provide for a return of capital rather than a return on capital. While the interest rate on the 10 year is prohibitively low right now (2.72%) traders are still piling into the Treasury market.


Notice the following on the three month chart:

-- Prices have clearly moved above the upper trend line of the year-long consolidation pattern

-- Prices are above all the SMAs

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

-- The shorter SMAs are above the longer SMAs

Bottom line: In general, this is a very bullish chart. With the interest rate on the 10 year so low I am concerned prices can't move higher. However, we are in extraordinary times right now.