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>I reall like the way bonds look they could rally.
>I figure that the rate hike next week is already factored into
>the market
Well, Hmmm....
Look at MBONDS.gif:
They DID rally, but in order to continue we have to overcome some obstacles first.
look at MBONDS.
We have reached the 50% retracement level of the BD decline and the 38,2% retracement of the CD decline (resistance)
The top E is also 50% of the AB rally (res)
We are just below the main resistance line from the top B (3rd touch)
MACD at (1) is higher than at (2) although the tops in price are lower.
This is bearish.
Time factors indicates that jan 26-31 could be a timewindow for thendchange.
the last part of the decline show increase in open interest,Conventional visdom is then indicating more short positions and this short rally shows a decrease in Oi, which does not indicate increased buying but short covering.
I also find some interesting coincidences in the backadj.gif
We are right now, just below red red trendline (no2).
In my view this is a an importan line, although it is not drawn in a conventional way, however it is touched a several times and you can draw parallel line which are also touched several time, giving support/resistance, and it seem sto me that we now are at a "natural" resistance after hitting a similar support last week.
Now let's see which one is the strongest.
My bets are that we will continue down
Also please look at the seasonal chart in the next post.
regards
Stig
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