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Sat down this morning with the bond charts to decide whether to scale back
on bond holdings which have appreciated nicely over 18 months. A couple of
years ago I had targets of 5.0% followed by eventual decline to 3.8-4.0% and
began loading up on long maturities as we did not want to get caught having
to replace short maturities at very low rates. The nasty reversal in early
October has been giving me concern along with the failure to rally quickly
off 5.3% area. On the fundamental side, I've been looking for a recession
running well into 2000, however the fiscal stimulus of 3 Fed rate cuts may
well counter any significant slowdown.
After reviewing the monthly, weekly and daily charts, I think for now, bonds
still look healthy but bear a close watch. The monthly and weekly bond
charts seem to be pretty much intact in terms of both channels and fibs. The
daily suggests that a rally through 130 would seem to negate much of the
reversal unless/until a second failure occurs below the 11/6 lows. Looking
elsewhere, I see nothing in utilities, copper or oil which suggests danger
for bonds. The only major danger signal I see is coming from lumber and the
housing sector.
Earl
-----Original Message-----
From: swp <swp@xxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Sunday, November 22, 1998 11:13 AM
Subject: Re: Fwd: GET: A useful tool
>Actually, I had a downside target on bonds for 126-20 and had recs for
>my clients to get long from 127-00 on down with targets for last week at
>128-20. Pull back this week, then 130/131. For anybody working at firms
>with reuters, I will be on Reuters TV at 2:00PM eastern on Monday.
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