The Bull Market in rates continues on with higher highs throughout November and December resulting in a new high for rates this year. Rates are now up 20% since the beginning of November.
Not only did rates set a new annual high, they are the highest they've been since 2011. The new high broke a significant down trendline in place since 2011. As resistance now becomes support at 2.9%, this ought to set a downside boundary for rates. There isn't much resistance until rates reach 3.25%. The indicators are still pointing up leaving plenty of room for rates to get there.
It's looking like a convincing break of a 7 year downtrend. All the indicators have room to move up. The MACD in particular has room after just crossing up. 3.25% by midyear is only a matter of time.
The bigger question is now how high can they go. This 20yr chart adds a little perspective. The 20 year downtrend is clearly evident. It suggest significant resistance just below 3.5%. It is unlikely to break such resistance on the first go around. The most likely scenario is that rates touch resistance late in the Summer and back off thru the end of 2014. Hitting the upper channel should cause the indicators to reset to Bull Market settings making RSI's in the 30's a thing of the past.
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