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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (51572)	1/26/2006 2:34:11 PM
From: shades	Respond to of 110194

DJ CHARTING MONEY: Fighting To Live Another Day . By Stephen Cox, CMT A Dow Jones Newswires Column NEW YORK (Dow Jones)--Given the formidable risks of Treasurys trading, the enterprise, practically, may be only a little bit about making money and quite a bit about not losing money. The move of the 10-year yield above the critical 4.441% technical level earlier Thursday may or may not be notable during the session. The level, strictly considered, is operative in end-of-month trading and so the Jan. 31 Federal Open Market Committee gig is liable to be more telling than Thursday's durable goods and jobless claims data, which evidently influenced the move. In fact, the end of the month is about a week away, and we're all short-termers now. In the meantime, avoiding market loss means, among other things, refraining from fighting the market. The daily chart shows The 10-year yield to be technically strong above 4.441% - 4.425% support, but it's also testing a potential top at 4.531% - 4.576% resistance including the important short-term level of 4.559%. A downturn from resistance followed by a move below 4.441% would of course restore the yield's long-term downtrend. Decisive trading above 4.576%, it appears now, would be the signal for an initial move up to 4.698% - 4.712% resistance. And, finally, bull and bear alike have to rethink the 10-year market now that the yield has moved above 4.441%. Decisive trading above 4.441% at the end of the month would oblige traders to consider an ultimate move to 4.910% resistance - a move that would end nearly a quarter-century of downtrending yields. Dollar Takes To The Upside No doubt, higher Treasury yields are contributing to the move of the spot U.S. Dollar Index, which is now above 88.32 - 88.22 support. As long as support is intact, the index would be going for 89.33. The signal for the move would be decisive trading above 88.65. The dollar is technically strong against the yen, having moved above Y115.89. But there may be a top somewhere between Y116.67 and Y117.53, and Y117.05 is a top candidate for that honor. The euro is still floundering just below $1.2288 - $1.2349 resistance, which is a potential top. The top would have to be confirmed by a dip below $1.2149, however. Stock Market Bulls Get A Little Lonelier The uptrend of the Dow Jones Industrial Average from last October's low broke down on the daily chart a week ago when 10768.01 support was taken out. That number is now resistance, of course. It blocked the DJIA's rally on Wednesday, and the average as of this writing is stalled at the number once again. A dip to the current downtrend low of 10661.15 is probable. An extended move would be targeting 10585.80, perhaps 10475.10, the lower number being ominously close to monthly breakdown support at 10452.63. -By Stephen Cox, Dow Jones Newswires; 201-938-2064; stephen.cox@dowjones.com (Stephen Cox, a chartered market technician, is chief technician for Dow Jones Newswires.)