Tuesday, July 14, 2009

Treasury Tuesdays

The long-term chart shows the Treasury market was in a long-term rally starting in mid-2007. This was a direct result of the credit crunch, as investors sought safe assets during the turmoil. Now that things are mellowing a bit we've see a sell-off in the Treasury market. However, notice that while the RSI and MACD have been declining for most of the year they are both in a position for a technical rebound. In fact, the MACD is currently making a turn to a more bullish orientation.

The IEFs have rallied for about the last month or so. However, notice they are doing so on decreasing volume. This is usually a sign that the market is about to turn because it indicates the degree of excitement about the security is decreasing. However, we also have two technical indicators that are saying the market will move higher. Finally, prices are also above the 10, 20 and 50 day EMA, the 10 day EMA has crossed over the 50 day EMA and the 20 is about to follow. Aside from volume, this chart says we're going higher.