Long Bond Update!

I posted four times about a treasury market that was acting strangely:

In Long Bond Could Trade At 4% And Below!, I posted about the $USB, the chart of the 30 year Treasury (see chart)

…it appears that the Percentage Price Oscillator (PPO) is about to cross over reulting in a BUY signal. In January, 2008, the $USB went to the highest level since before 1999. Recently, the pullback from 122 to 115, looks like a correction to the main bull market. The chart looks like the rise is ready to resume.

The PPO did cross over, resulting in a buy signal, however today it reversed and crossed back AND the 200-day moving average was broken. The buy signal is voided!

No change in outlook for the Two Year Treasury Yield ($UST2Y).
However, the Ten Year Treasury Yield ($UST10Y) has rallied back to the 200-day moving average instead of breaking down.

In Strange Market, I wrote:

DJIA is down because of fears about inflation worsening, Oil hits new high, USD down and CRB Index up, yet interest rates down; U.S. 10-Year Treasury at 3.78 -0.05%

Today, the strangeness continues: Bill Murphy writes US interest rates are on the rise, reflecting the growing inflation in our country.”

Gasoline, here, is now at $4.099; oil rose $2.18 to $131.18, yet the USD rose and Gold fell and Norman Fosback gets a buy signal based on his Recession Buy Indicator.

I once had a client ask me, “Why does it have to be so hard?” I responded with the Tom Hanks baseball cliche, “If it wasn’t hard, everyone would be doing it!” My friend Bill says it best:

The entire financial & investment situation – individually and collectively – is one huge puzzle.

Maybe the toughest I’ve seen. One better be darn flexible, and very disciplined.

Bonds hit the fan says the The Wall Street Examiner


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