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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (16865)	6/11/1999 1:37:00 PM
From: Les H	Respond to of 99985

U.S 10-yr T-note at 6 pct, highest since Oct 1997 --- rumors of Fed meeting NEW YORK, June 11 (Reuters) - A slump in the price of the U.S. Treasury 10-year note, widely used to determine mortgage and other long-term consumer rates, pushed its yield up to 6.0 percent for the first time in 20-months on Friday afternoon, as investors continued to dump government debt amid fears of rising inflation. ''The market trades horribly,'' said one trader at a U.S. primary dealership, noting there has been hedge fund and foreign account selling. ''It doesn't trade like a market that will bottom out soon. It trades like a market that will continue to trade lower.'' At 1250 EDT/1650 GMT, the 10-year note was at a session low of 96-8/32, down 18/32 from Thursday's close. Its yield jumped to 6.01 percent -- its highest since October 24, 1997, the session before the stock market plunged -- from 5.93 percent. Traders said the market fell after rumors of an emergency Federal Reserve meeting began to circulate. Some players said the meeting -- which has not been confirmed -- was to either raise rates inter-meeting or to bail-out an ailing hedge fund. The Fed is set to meet on June 29-30. The market widely believes the Fed will raise rates at that time.

To: pater tenebrarum who wrote (16865)	6/11/1999 1:52:00 PM
From: donald sew	Read Replies (2) \| Respond to 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