The Long Treasury ($TYX)

I still view the bond market as overvalued, so I do not
post much about it. However, the recent spike up in the
yield on the 30 yr Treas. is interesting. I like to
watch bond yields against their 40 wk. moving averages.
When yields stray 40 or more basis points from the
averages, it is worth noting, as a trade might be at
hand. The $TYX at 5.25% currently, is over 40 basis
points above its 40 wk. M/A. When you think of the bond
in terms of price, it is fair to say that it is becoming
oversold. As you will see on the $TYX chart linked to
below, the 10 week RSI suggests it is oversold, and
interestingly, the yield has moved up to significant 12
month resistance. Worth keeping an eye on.

The Treasury has responded to the significant upticks in
the ISM Surveys of new orders for both manufacturing and
services for both April and May, continuing low unemployment
insurance claims and the steadfast climb of industrial
commodities. Bond players have grown concerned that a
possibly stonger US economy could scotch expectations for a
lower Fed Funds rate and also lead to further inflation.

However, by my approach, the technical signs now say I
should watch to see if there might be a mildly good trade on
the long side of the market. The $TYX chart.