Tuesday, December 9, 2008

Treasury Tuesdays

Let's start with the long end of the market

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Notice the following on the TLT's

-- Prices consolidated in a triangle pattern from September to mid-November then had a very strong rally

-- The rally from the break-out to the 110 level is a gain of 12.24% -- a pretty impressive monthly gain in the stodgy bond world

-- Prices are above all the SMAs

-- The shorter SMAs are above the longer SMAs

-- All the SMAs are rising

The US 30 year Treasury is currently yielding 3.15%. I have to wonder if that is adequate compensation for a 30 year risk from a 30 loan.

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On the SHYs (the short end of the curve) notice the following:

-- Prices started a rally in late June

-- All the SMAs are rising

-- The shorter SMAs are above the longer SMAs

-- Prices are currently right at the 20 day SMA, using it for technical support

-- Also note the SHYs could be forming a long-term double top right now.

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On the year-long IEF chart, notice prices broke out of a year-long consolidation pattern. From low to high the IEF has rallied from 87 to 95 or a gain of about 9%.

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Notice the following on the three month chart:

-- Prices are above all the SMAs

-- The shorter SMAs are above the longer SMAs

-- All the SMAs are moving higer