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Earl,
Here's a chart of long treasury rates vs. Utilities since the
20s...to me the correlation that everyone likes to talk about doesn't seem so
clear. Can't help but believe that some utilities are not going to get
stung on hedging given the spike/collapse of prices of both NG and
electricity. If gas breaks here, there is no good support til about
$1.95-2.00, another 1/3 drop.
The tbill chart...horizontal lines are fib retracements of the
1940-81 rate increase. First leg down stopped pretty close to 23.6%, so
I'm inclined to believe next leg will get to 38.2%, or about 1% in rate.
The angled babson lines just give support/resistance levels along the way.
The most important fact for me presently is the break of the 50% middle yellow
line, which tell me that rates will keep dropping til they get to the next
line. If rates rally above the upper white line from here, I would suggest
considering all previously said as all wet.
Chris
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