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While updating my monthly TBond chart this morning, I happened to notice
 that 4.8% is the 78.6% fib retracement of the entire rally in interest
rates
 from 1946-1981 and this is exactly where the decline in rates stopped on my
 monthly chart. While I have fib based projections to 3.8-4.0%, the 78.6%
 retracement level is not infrequently a very important and very strong
 support/resistance level. The first indication of a major bottom/turn in
 rates would be a monthly close above 6.05% which is well below the 38% fib
 retracement of the last major decline from 94 at 6.11% and a 262% fib
 projection of the initial rally from the 98 bottom at 6.08%. A declining
 trendline drawn across the 94 and 97 peaks has already
 declined into the 6.25% area and projects resistance further out around
 6.10%. While rates may eventually edge lower, the above measurements
suggest
 that one should not dismiss the possibility of rates reaching the 6.10%
 level during the next 6 months.

 Earl


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