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Observations made

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Now that the bond markets are closed we are now left without one of our primary guides, perhaps at a time when we need it most. The closing YIELD on the 30-year bond (TYX.X) stands at 5.343% and we saw a big round of buying in bonds today. The question remains unanswered as to why investors are snapping up these lows YIELDS, but we should have an answer soon. It could be a defensive move by investors just in case the Fed doesn't move on rates this week and as one subscriber questioned, "might this not just be the climax and investors fleeing from stocks and into bond." It could be, but we're aware of such "market psychology" and the effect it could have on things.

JDS Uniphase

Many subscribers may be noting that shares of JDS Uniphase (NASDAQ:JDSU) are trading at yet another new 52-week low. On February 20th, we did an exercise in the use of retracement brackets and tried to get inside the heads of market makers. If the chart of JDSU is any indication of what market makers may be doing here with four-lettered stocks, traders that took heed in my guidance to trade smaller lots know why. With the NASDAQ within 3-points of a new low I wouldn't expect market makers to be showing big bids at current levels.

Charts bogged down

Once again, I don't know if this is foretelling or not, but I've been unable to get a quote or a chart from my charting service and this usually happens when things pick up (volume wise) in the markets. When they recover, I'll have some charts, but we've laid things out pretty well over the past couple of days and now it just comes down to monitoring levels and not letting trades get away from you.

Jeff Bailey
Staff Analyst

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