Market Sense and Sentiment

[Caradoc]

Call it a flag or a pennant, it looks like the long bond is about to make a major move in one direction or the other:
http://www.jsmineset.com/dispimg.asp?imgsrc=%2E%2Fimages%2Fchart%2DDec152003%2D9%2Ejpg

My hunch is that the direction will be down, accellerating the current collapse of the US dollar. A couple of weeks ago, USDX broke critical support at 92.28. There have been two or three days of multi-billion dollar level support by Bank of Japan, but except for those days and 20 hours or so after Saddam's capture, the dollar has been tanking badly. Now at 88.32, USDX shows support at 82 and again around 60 or 61. Below that is a gaping void where no dollar has gone before but where all dollars appear to be headed. Six months ago, I would have thought that equities and real estate would both collapse at the same time. Now I'm not so sure. Could be that both equities and real estate will both simply escalate in price in reaction to however low the dollar goes. What's ironic is that such appreciation -- although potentially taxable as a capital gain -- amounts to no more than breaking even.

Caradoc