Short Term Trading Member Forum

[techcharter]

10yr Tsy Yield AND USD both UP

The yield on 10 year treasury is loooking to continue moving UP. The yield has been trading above the 50 and 200 day moving averages, which are both trending UP. The MACD has found a bottom, and the bollinger bands are starting to open to accomodate a continued rally.

http://stockcharts.com/h-sc/ui?s=$tnx&p=D&yr=0&mn=6&dy=0&id=p75635173805

The USD also experienced a sharp move higher today. The bollinger bands have started to open. The relative strength index was uptrending while the index was declining 4 to 6 months ago. This divergence was a warning of a major reversal ahead. Now the RSI highs and lows are in synch with the index, confirming the trend change. The 50 day moving average is moving up and about to go above the 200 day moving avg, often a buy signal. The 200 day avg has not bottommed; however, its rate of decline is slowing faster.

http://stockcharts.com/h-sc/ui?s=$usd&p=D&yr=0&mn=6&dy=0&id=p75635173805

So how can the paradox of rising yields signal inflation, yet the dollar index is rising? Answer, this is not inflation, it is DEFLATION. Credit and income dry up and everything, the most liquid first, is sold to raise cash to pay off debt.