Thursday, February 3, 2011

Long bond rates up, bonds down??

As soon as our esteemed Fed Chairman released his comments this morning the bond market sank, and gold and silver rallied. It is probable that bonds will continue to sink over the next few weeks. Here are charts of the Lehman 20 yr. Inverse bond fund. (TBT) A daily chart, and then a weekly chart to give some perspective.

A break above 40 on the weekly and there is no resistance to about 45.
(old support becomes resistance) Lets see how it turns out.
As the TLT chart shows, a drop from here and next probable support at the 85 area. Below 80 is uncharted waters. It was the attempt to drop below 80 that started this whole mess in 08. High oil meant weak bonds, meant popped housing bubble and popped banks....

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