Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

GoldSeek Radio: Gerald Celente and Wolf Richter, and Chris Waltzek

SWOT Analysis: Tightened Supplies Could Be Good for Copper
By: Frank Holmes

Technical Scoop - Weekend Update Mar 19
By: David Chapman

The Wealth Machine That Rising Interest Rates Create And The Conflict With The National Debt (Part 2)
By: Daniel R. Amerman, CFA

2018 Reversal Dates for Gold, Silver and Gold Stocks
By: Przemyslaw Radomski, CFA

Standing Ready to Lease Gold
By: Keith Weiner

Is The U.S. Economy Really Growing?
By: Peter Cook, CFA

Pro-govt. Turkish paper reprints Manly's RT exposure of gold price suppression
By: Chris Powell

Yet Another Chart That Screams “Look Out!”
By: John Rubino

Bonds, Inflation And Amigos
By: Gary Tanashian


GoldSeek Web

Long bond breakdown

By: Dan Norcini

 -- Published: Monday, 16 February 2015 | Print  | Disqus 

Well, here we go again. I do not know how many times over the past year or so I have noted what looked like a chart breakdown in the US long bond. By that I specifically mean a close BELOW the 50 day moving average. Generally, that will get technicians to sit up and take notice and begin to approach a market from the short side. Each time I have noted this however, the bonds have done a flip-a-roo and back up they have gone continuing the bull streak.


This time, maybe, just maybe, we are seeing an end to the ultra low long term interest rate environment. As badly at this market has tripped me up over the last year and a half, when it comes to turning negative on it, I am somewhat reluctant to get too worked up about a close below the 50 day moving average once more. This time however, it While it cannot be seen on this daily chart view ( look at the weekly chart below), we were up near ALL TIME HIGHS in the bonds. That translates to ALL-TIME LOWS in long term interest rates.


The question I ask is how much lower can long term rates go from these levels? I suppose they could indeed head lower but I shudder to think what economic conditions would be like were that to occur as it would signify a near collapse in US economic growth and a huge failure on the employment front.

Note on this intermediate term chart ( weekly) the MACD has not yet given a Sell signal. It has hooked down however.


Let’s switch the indicator to look at the ADX/DMI however because there is something quite notable that we need to discuss. The ADX, that line which when rising indicates the presence of a strong trending move, has finally hooked lower and turned down. It has done that before but this is what has my attention – it is doing so from ITS HIGHEST LEVEL ever since 2009! Look at the horizontal red line I have drawn across that indicator. You might recall that was when the very first QE program was initiated by the Federal Reserve and traders reacted by pushing bond prices sharply higher. However, it was not until the full impact of all those longer term bond purchases was being felt in the interest rate markets that the long bond went on to make its all time high in the summer of 2012. Look and see – even at that point, the ADX was not nearly as high as it currently is.

The same can be said of the Positive Directional Movement Indicator (+DMI BLUE LINE). It too is at its highest level since that same time frame in early 2009!


In other words, we have experienced one of the most powerful uptrends in market history in the bonds – a trend that goes back over 30 YEARS and this trend, may just possibly be finally coming to an end. I do not want to read too much into one week’s price action in a trend of this duration, nor even one month’s price action, but given the level at which the bonds are trading, and given the comparable incredibly low corresponding interest rates, I personally believe that we have seen long term interest rates go as low as I will ever see again in my lifetime.

The only thing that I believe will disabuse me of this notion, is as I stated earlier, a complete economic collapse. Barring that, one has to wonder if 30 years of falling long term rates has now become one for the history books.

| Digg This Article
 -- Published: Monday, 16 February 2015 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2017 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.