Tuesday, March 3, 2009

Treasury Tuesday

Despite hitting a high at the end of last year, the short term end of the Treasury market has been falling since. Prices are now in a downward sloping trend channel. Also note all the SMAs are moving lower. Prices have been running into upside resistance at the 20 day SMA.

Prices dropped from a high at the end of last year and have been dropping since. But note that prices have been consolidating for the last 2-3 weeks in a triangle consolidation pattern. The main reason is prices have been caught between convergent market trends. On the bearish side, Treasuries were very overbought at the end of last year and needed to fall. In addition, there is tremendous downside pressure from the massive supply coming on the market. However, Treasuries are still the safe haven option which helps to stabilize the downside moves.