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Treasuries close at their highs

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The bond markets is closed and investors scampered toward Treasuries again today, but today's trade wasn't long enough or bullish enough in bonds to have the "big wedge" finding any technical break of its range. This leaves many equity traders waiting yet another day to see if treasury YIELDS will break out of their YIELD range and potentially signal future price direction for stocks.

10-year YIELD Chart - Daily Interval

In today's market monitor and then again in today's 01:00 intra- day update I made mention of the 10-year Treasury YIELD ($TNX.X) and action in its YIELD. As a quick refresher, Treasury YIELDS fall as price rises.

I views yesterday's early "reversal" from the rounding lower 50- day SMA as somewhat bearish toward equities, and today's follow through buying has appeared to leave stocks somewhat starved for cash, at least after the nice rally just after chief U.N. Weapons Inspector Blix's report. Traders can "make the tie" between the 10-year YIELD action in recent sessions and stocks. While I think an equity bear would want to see the 10-year YIELD chart break the upward trend and close BELOW that trend by session's end, that wasn't what happened today, and traders will have to wait another day and watch things closely tomorrow morning and see if the bond market can't give further signal for equity price direction.

The U.S. Dollar Index (dx00y) 100.00 -0.52% looks to have pegged its psychological 100 mark into the end of its trading session and also gives a somewhat "neutral" look to things.

Since the bond market's close, stocks have edged up from their lowest levels of the session with the Dow Industrials (INDU) 7,977 -0.78% now off just 61-points, after trading as low as 7,935, or 106-points from yesterday's close.

The broader S&P 500 Index (SPX.X) 843 -0.9% has also recovered some of its daily losses, now down just 8-points after being down 13-points at the 03:00 PM EST mark, which is when the bond markets close.

Action into the close certainly hints that bearish equity traders, without the guidance of the bond market may be squaring up some "overly short" position into the close, and getting ready for what the bond markets do early in tomorrow morning's trade.

Jeff Bailey

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