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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 689.52

-0.3%

Jan 7 4:00 PM EST

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To: pater tenebrarum who wrote (16865)	6/11/1999 1:52:00 PM
From: donald sew	Read Replies (2) of 99985

Heinz, >>>> there is widespread belief that the bond is way oversold and due for a bounce. but what if the long term support doesn't hold? as far as i know, the more important a trendline is, the more significance should be attached to a break thereof. and the bond is trying very hard to do just that... <<<<< Yeah, I kept on hearing from all sides that 6.00% would hold and there would be a strong bond rally. In fact I am also looking to get into bonds, but decided to wait for a confirmed topping process like a double-top,lower highs, etc instead of trying to catch a falling knife. I may not get the exact top of the RATEs, while waiting for technical confirmation, but that breakout to the upside looks ominous. Im getting similar feelings as when stock market kept on moving up above most expectations. When the rates just easily cut thru 6.00% felt like the same when the DOW easily cut thru 10,000 and ran up another 1000+ points. Im thinking that 6.25% should be a fair target but I wont underestimate the way the rates are roaring upwards. I would not be surprised if rates exceeded 6.25% by alot. Could you imagine if interest rates got close to 6.50%+. I realise many would say that is impossible, but we should keep in mind that some liquidity is moving away from the U.S. markets regardless if there is real inflation or not. seeya

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