Monday, September 8, 2008

Bond Bubble Update

Treasury futures seem to have gotten a little ahead of themselves last week and are continuing the decline started Friday morning as this week begins. but I'm not hugely concerned about a major reversal of trend at this point. the 30 Year, for example, could back off another couple points from here and still be bullish. if it closes below, say, 115 that could very well alter my outlook though. I guess we'll see what the market brings.

below is a point and figure chart of the 30 year bond yield ($TYX). once this breaks below 4.1% and then 4.00%, the rate could easily decline to 3% (or lower) over a three to six month period (and it could move even faster than that). fair warning.