Thursday, August 11, 2011

A Quick Look At The Treasury Market

Earlier today I looked at the stock market. Let's look at the other, more conservative side of the investment coin -- the bond market.

The 10-day, 5-minute chart is still rallying. However, prices are just about to move through a shorter term (3 1/2 day) trend line. In addition, prices have been consolidating in a fairly tight range over the last day or so. Also note the higher volume level over the last three 3 1/2 days (follow the blue line). This might indicate a buying climax.

The daily chart and its respective indicators are very bullish. All the EMAs are moving higher with the shorter above the longer. The A/D and CMF both indicate money is still flowing into the market and the MACD is still very positive, telling us the market's momentum is still strong. However, notice the candles are a bit above the EMAs, indicating the market may be slightly over-extended at this point. A pullback to the 10 day EMA would make tremendous sense, especially as people start to take some profit off the table.

However, there is still no indicator of a sell-off developing.