FX Calendar

Monday, August 23, 2010

On the move: Treasury Bonds




These are short term charts with short term outlook. But it looks like the 10 year Bond is poised to move higher from here.


The mainstream media is already reporting that Bonds are in a "bubble". Retail Investor are buying Bonds at a historical level. One can anticipate the shock and awe (more so dismay) of Mutual Fund Managers who are looking at capital outflows. One possible outburst: "How dare the retail investors douse their fingers in Bonds! They will surely burn when this bubble bursts."


Buyer beware: There is some merit in this argument. "When" the bubble bursts, it will surely harm a lot of participants. But till then Treasury Bonds seem to go higher.


Many times the bubbles inflate further before bursting!



On the 15 minute chart of US Treasury 10 Year Note, it looks a running flat a-b-c correction is over and the trend is resuming upwards in 5 waves. A 3 wave correction will be the confirmation that prices will trade above 126.





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