Monday, September 20, 2010

Yesterday's Market

Let's start with the Treasury market. Over the last few months, Treasuries have benefited from a flight to safety as investors have grown more concerned about the situation in Europe and the US economy.

Both the IEFs and the TLTs have broken their uptrends (a) in a disciplined, downward sloping pennant pattern (b) Neither has had a massive downward shift; instead, the sell-off has been gradual and disciplined. However,

The technicals of both charts are very interesting. Both are still seeing a net inflow of cash according to the A/D and CMF indicators. Obviously, both are seeing a decrease in momentum. However, until the A/C and CMF lines confirm the outflow of cash, it's hard to say this is a reversal of sentiment.

Last week, stocks traded in an extremely narrow range as

they continued to run into upside resistance. However,

The NASDAQ has broken through key levels, but

The risk trade -- the IWCs -- are still in a downward sloping trajectory, indicating that equity investors aren't yet willing to make a big move into the riskier side of the market.

Finally, gold make a strong move about previous resistance by printing a strong bar. This has been desperately needed for this rally.