Memorial Archives

Long Bonds & The Yield Spread
posted Sep 26, 2004 at 12:51PM

Daily Bond Chart

Well as we can see from the charts above and below this is hardly a contrarian buy at this time. At the same time when bonds are trending this strongly one would want to see some bearish divergences,,,before being adamant about calling a top.

One potential scenario is that bonds, in the near future will pull back to their near term trend-line. This would correspond to some strength in the dollar and wave 4 pull-back on the HUI.

Weekly Bond Chart

Yield Spread

Again given the Fed has made it clear to the market that more rate hikes are coming...the only way this chart can at least "bounce" is bond prices falling.

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