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1) I use the DJ Utilities as a leading indicator and confirm/non-confirm for
bonds. The attached weekly DJ Utilities chart supports continued flat to rising
bond prices.
2) I use long term historical charts of bond yields to track the direction of
thrust. Not too many weeks ago we made a new low in yields and the case for
continued decline in yields will remain intact until we take out something
significant - like previous pivot high in 7% area. By the same token, we need to
reach the 5.5% area within the next few months to support the case for continued
decline in yields.
Two charts are enough, however, I use the spread between 2yr Treasuries and Fed
Funds to indicate the probablities of short term up/down moves in rates. The
spread spends most of it's time in neutral territory. The recent decline to a
negative spread is suggestive of a move up in rates.
I also run long term historical charts on the 13 week TBill and one of the truly
remarkable things about rates it that the 13 week TBill has traded in a .5%
range for over 3 years now - a phenomena which has not occurred since the early
40's.
Earl
-----Original Message-----
From: Graham Critchley <gcc@xxxxxxxxxxxxxx>
To: RT Discussion Group <REALTRADERS@xxxxxxxxxxxxxx>
Date: Saturday, March 07, 1998 11:52 PM
Subject: MOTW
Attachment Converted: "c:\eudora\attach\TBNDWEEK.gif"
Attachment Converted: "c:\eudora\attach\DJUWEEK.gif"
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