Let's start with the most important chart in the Treasury market -- the 7 - 10 year chart.
![](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uEa0CS5HimOUn50m9pJMDNEdbtdujDdkdlkrYqiMqWSMtfwet27Dc24N2fVakg3oYRsDziT8uYnL1By0oC4Dh3QtkS2kQK6_bIxjpJo94SueJe8eeomH3Bfpfmn5Bwsij-=s0-d)
The middle part of the curve started rallying at the beginning of July. This was a flight to safety caused by the start of the credit crunch. Prices rallied until early March of this year when they started to move lower.
![](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_siAduSKCDbmNiyEwWo_lflkpeBk_EEozojVGj4QsqG7weJpnB2vd7xy6rqpyZkVskWI97gM_TdmXLJZyKiV94FdtjDroWpCtPLY5sGeYAUicMHghXYSPOW1_QhmQu-q7r1DQ=s0-d)
On the 3-month chart, notice the following:
-- Prices have moved below the 200 day SMA
-- The 10, 20 and 50 day SMA are all moving lower
-- The 10 and 20 day SMA has move below the 200 day SMA
-- Prices are below the 20 and 50 day SMA; prices are just above the 10 day SMA
![](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vk10sds8yjs1bQdpVemQN54zgMMEaDBNA3TbqtfeQQahxfTstv43KIOGT4voGJXoKDeaIuYvKm3pr3XqSfYcJ1oOH1gQHIDMGRri96WCI_dT0Cm2qjet7TEMq4DBxe_UQ=s0-d)
The long end of the curve (20+ years), is a bit different. They consolidated from the end of November/beginning of December to mid-May of this year. That's when they fell below support and moved lower.
![](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sCl3tPIpK9KAnklVyH6NySh9U2PYD6N8TgqLREFoyuSWLqxQYcFJy0kAfKy7qScYsVyh5BD8Mqxe7dZ_BA8z60XRfevHiw623kRK8dstx_DSMTktq6X9FA3XQ0wqD0I2g5rQ=s0-d)
On the three month SMA chart, note the following:
-- Prices are below the 200 day SMA
-- The 10, 20 and 50 day SMA are moving lower.
-- The 10, 20 and 50 day SMA have all moved below the 200 day SMA
-- Prices are in a clear downward sloping channel
-- Prices are just above the 10 and 20 day SMA. But prices have used the 20 day SMA as a pivot point for the last few months.
![](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sevC9TrSXZ2XYSq_heovdidyyYDNPe-HbtbD9QT45j8EuVpdGJLhTUrGSduXBxDo0OUjlPlyVQZ6OPfpTUzHXD7Zm37nrGljulRfOd8b6colI5hNSCDePTAtCIzoxIg8vU=s0-d)
The short end of the curse (1-3 years) really benefited from the credit crunch. They rallied hard for nearly a year as traders parked their money in short-term bonds.
![](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_sCl3tPIpK9KAnklVyH6NySh9U2PYD6N8TgqLREFoyuSWLqxQYcFJy0kAfKy7qScYsVyh5BD8Mqxe7dZ_BA8z60XRfevHiw623kRK8dstx_DSMTktq6X9FA3XQ0wqD0I2g5rQ=s0-d)
On the short-tern SMA chart, notice the following:
-- Prices are below the 200 day SMA
-- The 10, 20 and 50 day SMA are all moving lower
-- The 10 and 20 day SMA have both moved below the 200 day SMA
-- Prices are in a clear downward sloping channel.
All of these charts have clear downward sloping channels that have been in place for a few months. All also have downward sloping short-term SMAs (10, 20 and 50 day SMA). The bottom line the Treasury market has been correcting for a few months and the charts indicate we're in for more of the same.