S WAVE CHARTS

[snootmagruder]

JXY,

Thanks for your comments, Please consider my following comments:

Inverted yield:

Check the screen shot here: http://screencast.com/t/pCg0o7Wb56aS

Inverted yield happens when investors believe the Fed will be lowering interest rates to combat a falling economy. The problem with this is that they can't lower interest rates unless of course it goes into negative yields as it has over in Europe lately
The QE experiment has yet to reveal it's "unintended consequences"
and it could be fast moving when it does start. The US 6 month treasuries have been rising as well, see 1st chart,
During the great depression, the Fed was limited in the money supply by the gold standard which mandated reserves for the supply. The current situation has the Fed with a very large balance sheet, interest rates at zero and again it seems that their back is up against the wall and their actions are very limited in the event of another downturn.

On the second chart, I used the standard 20,2 bollinger bands that have a simple moving average (20) for the median line. I think this is used by the majority and not the 20 EMA as you have. Notice we are still below the 20 and the history of the 20 can be substituted for your EMA with very similar results. (click on any chart to increase size)