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T-Bonds and Gold Signal Impending Stock Market Break

Discussion in 'Forex Daily News & Outlook' started by futuretrends24, Jul 31, 2010.

  1. futuretrends24

    futuretrends24 New Member

    Apr 30, 2009
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    Today’s sample of Futures Analysis from FuturesHound.com

    Treasury futures rallied in flight-to-safety buying as yields in the 30-Year Bonds and 10-Year Notes plunged. Expectations are the Fed is likely to keep interest rates down for a prolonged period of time. Despite the early recovery in the equity markets, the Treasurys held their ground, suggesting that there is real concern about the condition of the economy. The fact that Fed officials are backing the call for a weaker economy is the key driving force behind the move in the Treasury instruments. Traders have decided that the Fed is likely to keep pressure on interest rates until the economy can turn around.

    Something has to give in either the equity or fixed income markets. The T-Bonds and T-Notes seem to be the best indicator of the state of the economy. This means that the pressure should be on the equities.

    The fact that December Gold rallied on Friday is a strong sign that money is leaving the paper assets (stocks) and being reinvested in the hard assets (gold). Although gold could not post a weekly closing price reversal bottom, the pattern looks positive for the start of a retracement rally. All it needs right now to trigger a rally is a weaker Euro and stock market.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

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