Tuesday, December 15, 2009

Bond Market Makes It's Presence Felt

As the administration pushes its spending proposals, the bond market has been speaking quite loudly the past few days and just broke through its trading ranges of the past six months.

Technically speaking, we have a clear inverse H&S pattern possibility on a 60 min and a much larger daily scale.

These technical setups equate with fundamentals and it is difficult to say when the vigilantes make life difficult for the various government entities. But this much is clear.  While equity markets can be controlled and manipulated even for a time, the bond market is far bigger than any government entity.

While some are calling for the markets to go higher, and it is highly likely, the preponderance of news today has to be considered negative between the Empire State survey, the PPI, the rise in yields.

Eventually insitutional money will realize that this time really is not different, ie, not different than past credit crises which are usually followed by fiscal crises. 

That being said, the markets will likely break through resistance and head higher anyways I guess.  

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