That possibility is developing and is predicated on two important technical
patterns as discussed below.
First, between November 2007 and March 2008, the 30 year bond yields (Symbol:
TYX) formed an Inverted Head & Shoulders pattern. The projection for this
pattern is a yield level of 53 which is 20% higher than yesterday's close.
Second, the TYX has now developed a positive Divergence similar to the Nov.
07 to January 08 divergence that resulted in a sharp rise.
Both conditions are now suggesting a high probability for a possible up move
that is 20% higher than we are now. Such a move would coincide with a further
tightening in available credit in the banking sector and also put pressure
on home sales and variable rate mortgages.
Investors should keep an eye on how these patterns play out, because they
would have a negative impact on economic conditions, corporate profits, and
the stock market. (This chart is updated daily on our Advanced subscriber site.)
Marty Chenard is an Advanced Stock Market Technical Analyst that has developed
his own proprietary analytical tools and stock market models. As a result,
he was out of the market two weeks before the 1987 Crash in the most recent
Bear Market he faxed his Members in March 2000 telling them all to SELL. He
is an advanced technical analyst and not an investment advisor, nor a securities
broker.
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