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30-year YIELD turns green!

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One thing I'm noticing in the past 90-minutes is that the YIELD on the 30-year Treasury (TYX.X) is fractionally green. This should have traders looking at their bond yield charts to see if this is could indicate a short-term firming in stocks.

30-year YIELD Chart - 60-minute interval.

On January 11th, we saw the YIELD on the TYX.X trade above the 200-period MA on the above chart and the NASDAQ Composite saw a big reversal take place that day too, not to mention the next several sessions. BEARISH and BULLISH traders should take this as a "heads up" to a potential reversal!

NASDAQ Composite Index Chart - 60-minute interval.

The NASDAQ Composite looks like its trying to find some footing on our upward trend. We immediately need to establish levels to be looking for short-term resistance and that would be near 2,650, or the 38.2% retracement level and our 200-period MA. These will be the first two "tests" for bullish traders to be monitoring if they're looking long. It would also be a level I'd be using for bearish traders to be lowering their stops or correlating their bearish trades with.

Networking Index Chart - 60-minute interval.

I like to monitor the "culprit" or the "reason" for a market decline more than I do trade it. Often times stocks get "generalized" and get sold for the wrong reason. If Cisco's sector starts to recover, then what about some software stocks or disk drive stocks? If they got hit earlier today and are trading near support, they may be the best ones to actually trade bullishly in. Earlier today I did talk about CIEN and COMS in the networking space as potentially strong stocks in the networking group for traders to trade bullish if they held together, but don't rule out other technology groups that may look better.

What about Informix (IFMX)?

One stock I still think has bullish technicals is Informix (NASDAQ:IFMX). How has that stock acted during the recent NASDAQ decline? It's in the software group and has little to do with networking.

Jeff Bailey
Staff Analyst

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