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The CPI at 7.30 sent the bonds down to yesterday's
low, where it bounced with a classic DS and then rose superbly to yesterday's
high, where it charged through with a tell-tale gap, then on to DBYH, then up to
the pivotal high at 104^01, where there was the smallest of retracements, before
going on and up to virtually the first stall of the day, just below the low
of the first of the 3 Black Crows... more or less wiping out their import on
events!
40+ ticks from the bounce to the stall, in almost a
straight line, and unless there is something quite dramatic in the last hour, we
will end with a strong DS on the daily chart - making the bonds looks
bullish again.
The day produced one most unusual sights of the
S&P gapping up hugely and then running all day in the tightest of ranges,
rather than running opposite to bonds. It was as if the bonds were doing
what they have not done in years (literally!) lead the spoo!
Certainly, the latter was refusing to go in the other
direction... Could be significant or just one of those
things.
Anyway, the doji day following the 3 black crows
rather put paid to that downward movement, and now this strong DS may
herald higher prices again and that might well be sorry news for stocks -
although from what I read here, most people seem to be thinking of a rally,
before a decline later.
What is the EW take on the bonds now,
anyone?
Bill Eykyn
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