May 30 2007, By Bill McLaren:
We’ll use this as a representation of interest rates. Understand after every US war there has been a burst of inflation and this Iraq war will be no exception. Especially since the financing of this war has been with 100% borrowed money. We all know that the money supply growth has been excessive to say the least. I have not read nor heard of any discussions about fiscal stimulus and the subsequent inflationary hangover that follows. As I pointed out over a year and a half ago the long term cycles in bonds now point down for the next two decades. Rates move slowly so it takes time to establish trends in this market.
It appears as though they are getting ready to be the catalyst to ruining the party in stocks.
The high on this daily chart is a secondary high or lower high, the highest high in bonds or low in interest rates was two year ago. The price is now down to an “OBVIOUS” support level and how a market bounces or reacts from the OBVIOUS is an indication of the strength or weakness. You can see the last move up was weak and this move down has been very strong with only one day weak rallies the entire move down. I was looking for a three or four day rally up or even 11 days from the “obvious” and then a failure and run down to the next support at the May 2006 lows.
So interest rates are sitting on the edge of a cliff and will fall off, whether it is this week or two weeks, it’s going to occur. And could be the catalyst for the top in stock indexes
T-Note MINI Short
NL0000301083 / 238683
Renditen der U.S. Treasury 30 Year (U.S.):
2 Jahre, wöchentlich:
Schwarz: Zinsen in Japan
Blau: Nikkei 225
6 Monate:
