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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (66021)	6/10/2007 5:20:33 PM
From: Crimson Ghost	Respond to of 116555

Mish: Markets that go to extremes have a nasty habit eventually going to the opposite extreme. The now ending huge secular bond bull was in part a reaction to the extraordinary bond bear of the 1970s which saw TNX yields go well into the teens. But these things work both ways. The extremely low bond yields of the past few years in the face of booming asset market has set the stage for a powerful bond bear. Although bonds will undoubtedly rally when stocks finally break the rally may not be as strong as many think. And the next phase of the bond bear may carry yields higher than almost anyone expects.

To: mishedlo who wrote (66021)	6/10/2007 7:42:27 PM
From: ajtj99	Read Replies (2) \| Respond to of 116555

Mish, here's a post showing the TYX (30-year T-bill) main falling resistance out of the 1981 high yield: investorshub.com Here's the chart showing the 1981 and 1984 highs stockcharts.com The trendline that was breached last week was one that connected the 1994 highs and 2000 highs on the TYX. Here's the weekly rising wedge on the TNX (10-year) stockcharts.com Here is the monthly TNX showing trendline out of the 1994 and 2000 highs coming into play at 53.0 stockcharts.com The convergence of resistance at 52.50-53 ought to stall the bond rout tomorrow. However, it seems quite possible the TNX could move up to 54.50 to 55 this summer. The rules for trendlines are simple. Connect two consecutive highs or two consecutive lows. Draw at the extremes, not the bodies, as ignoring part of the candle brings bias into the trendline. There are some variations on charts using semi-log as I use and linear. Here's the linear monthly showing the 1994 and 2000 TNX highs being breached last week, and price running up stockcharts.com Here's the linear TYX 27-year chart without trendlines (the applet's not working right now. I'll try it later) stockcharts.com