Tuesday, November 3, 2009

Treasury Tuesdays

From a broader perspective, here are the broad parameters of the Treasury market.

A.) In general, prices are trading between two broad trend lines.

B.) A mini-rally started at the beginning of August. Prices have now broken through the trend line.

C.) There is a third trend line providing both support and resistance.

Looking closer at this chart we see:

A.) The EMAs are bunched together indicating an overall lack of direction for the market.

B.) Prices fell through support yesterday.

Treasury's are caught between a rock and hard place right now. The issuance calendar is huge which should be sending prices lower in a big way. Yet yields remain low by historical standards and there have not been any problems digesting the issuance so far.