Triple Threat in Treasuries
- Posted by Greg Harmon
- on January 11th, 2017
He can shoot the three, drive and dunk. He can block shots and make steals. He is a master at the pass for an assist and he can rebound. Opposing teams need to be worried whenever they meet him. LeBron James is a true triple (if not more) threat.
US Treasuries are in a similar situation to LeBron’s opponents. They face a triple threat of market technicals. The chart below highlights them. Rising off of the July 2015 low, Treasuries completed a 3 Drives pattern in July 2016. The reversal following retraced 88.6% of the pattern and stalled in December.
Since then Treasuries have looked positive. A momentum divergence to the upside was followed by price as the year closed. Good movement to the upside. But this upside movement has hit a wall. The question is whether it is a paper wall or one made of bricks. And as Treasuries sit here the Triple Threat looms.
Starting at the top of the chart, the RSI has stalled just short of a move over 60. This would put momentum into the bullish zone. At the bottom, the MACD has also stalled at the zero line. Both are trending higher and support more price movement to the upside but at critical junctures. Finally price itself has a hurdle to cross. It sits at the 50 day SMA as it churns sideways on the chart, and has yet to breach the November peaks. Until the Triple Threat has been removed Treasuries are a wait and see asset. A dead cat bounce that could gain strength.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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