-- Posted Friday, 14 April 2006 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
For investors who’d rather be smart than lucky
I had flagged a hidden-pivot support at 117^19 as a potentially important turning point for the June 30-Year Treasury Bond futures, but sellers demolished it on Thursday, telegraphing a strong likelihood of still higher yields in the weeks and perhaps months ahead. The June CBOT contract had already traded as low as 117^17, slightly beneath the advertised pivot, but the two-tick overshoot was not sufficient to seem threatening at the time. However, on Thursday, just ahead of the three-day weekend, sellers pushed the futures contract decisively lower, reaching a bottom of 106^30. A few ticks below 117^17 probably wouldn’t have made much difference, but this breach was fully 18 ticks, or more than half-a-point. It is akin to the groundhog seeing his shadow, and we should therefore brace for higher yields well into May, at least.
If this forecast proves correct, it implies that an already weak housing sector is likely to take a turn for the worse just as the real estate sector is entering its slow season. It also suggests that the precious-metals market could cool down some, since the dollar would presumably strengthen on higher yields for U.S. debt.
Of course, it goes without saying that stock-market investors on Thursday acted blithely unconcerned about the renewed upward pressure on yields. The Dow finished up slightly on the day, oblivious to the real world as always. Perhaps Wall Street is counting on a last-ditch hidden-pivot support at 106^13, to save the day? That’s a level that can be bottom-fished with a tight stop-loss, but I cannot guarantee that the anticipated bounce will be the one that sets America’s housing-and-refi economy on yet another life-sustaining binge.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 14 April 2006 | Digg This Article | Source: GoldSeek.com
