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Bonds Still Friendly to the Bulls; Currencies Are Close, but Not Quite There Yet

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Bulls are claiming victory in certain of our key tells, but the game isn't quite over yet.

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Any closing break above the blue line resistance or below the blue line support will tell us which in which direction the next big move will take place – so pay very close attention. A break above resistance could conceivably bring about a run to the upside with a target of around 1.10 (6500 pips from today's levels) while a break below support would lead at least to a move down to 1.00 (around 3500 pips from the breakdown point – should it occur). Options players might do well to simply bet on a large break in either direction occurring and eliminate the need to be correct in the direction.


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BONDS

The yield on the 10-year Treasury Note is still bullishly hovering above key support.

There's not much to add to what I have been writing about Treasury yields. They are clearly staying low due to the intervention from the Feds. However, they have not yet broken key support. Unless and until 1.548% is violated on the downside (on a closing basis), the wave count shown on the chart below is still likely valid and more upside in rates should be expected. That being noted, it's not a perfect trade entry at current levels for those betting on higher rates occurring.


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No positions in stocks mentioned.

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