Monday, September 13, 2010

Volatility is making new lows but Bond Yields are turning

10-Year Note is making Bullish Engulfing pattern with low at the 50-DMA Support.
So we look for confirmation on the upside.

10-Year Yield made a Bearish Engulfment right at the 50-DMA Resistance.
ROC is in overbought territory but RSI is just signalling a bullish trend so a confirmation on the downside is needed as we saw the same situation above in the underlying bond price.

Volatility broke to a new Low as complacency seems to win over fear and markets are managing to run higher. My guess is we break out of this state of mind very abruptly but in timing we must be canny so I'd watch for a close above the Horizontal line.

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