This week's Market update will be short with no charts. We are seeing DOW Theory non-confirmation, this is not to say that the non-confirmation will continue but it is 3 weeks now and it assumes more importance as the time goes by. Trannies made high on Jan 13th and DOW is making new high almost every other day.
30 year bond is at serious capitulation and very close to long term support lines. If we look at TLT chart (this is not an ETF for 30 year but they move in tandem) we can see that it is near 2-3 years support line. Price action around this support line will be important. Significant and decisive violation of this line can and will have impact on economy. I don't expect that this support will be violated decisively, if it does policy makers will have something to worry about and make adjustments. Any rise in interest rates have direct impact on borrowing cost which impacts business, consumers, mortgage, auto's and the list goes on and on. Given the importance of interest rates; I will be closely watching the price action around the long term support line.
I am excited about tomorrow's Superbowl and hope that tomorrow's game is close and exciting.
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