Wednesday, December 6, 2006

Daily 30 Year T Bond (USZ06) getting toppy


The daily 30 year T-Bond ( USZ06) is starting to suggest downside divergences. The MACD momentum is diverging lower while price action has continued higher. The recent bond rally has been a leading signal of three economic issues: 1) a lower inflationary outlook, 2) potential neutral to downside Fed rate action, while 3) mixed 4th quarter economic numbers are suggesting an economic softening.