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August 01, 2005
Rates Rising
The 30-year T-Bond Yield (TYX) surged in July, consolidated and looks poised to continue higher. TYX established support at 4.15% in June and surged above trendline resistance in July. A two week consolidation ensued (flag) and a break above 4.5% would be bullish for rates (bearish for bonds). Notice that TYX formed an outside reversal on Friday and this establishes support at 4.35%. Watch this support level for signs of bond strength and rate weakness. Otherwise, I expect rates to rise and bonds to fall. This will also impact interest rate sensitive sectors and groups.
Posted by Arthur B. Hill at August 1, 2005 07:23 AM