MBS WEEKLY: Bearish Bond Technicals Battle Mixed Econ Outlook
Posted To: MBS Commentary
Well well well, look where we sit. 10s rose from 3.60 to 3.80 in seven sessions. Took a short breather. Then fell from 3.80 to 3.60 in four days. Chop chop chop . On the week, the 3.625% coupon bearing 10 year Treasury note was +1-09. That's +41/32 from 98-24 all the way up to 100-01. Yields fell 14 basis point from 3.76% to 3.62%. Looking at a longer timeline….notice the cluster of weekly moving averages and rapidly narrowing trend channel. This pattern is called an ascending triangle or continuation pattern. It illustrates how trader positions are accumulating at higher and higher levels. If this chart was price, it would be very bullish. Meaning we would soon expect a breakout to the upside in the near future. Since the chart below is yield, we have to call it very bearish, at least…(read more)
Written by Adam Quinones on February 26th, 2010 with no comments.
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