HeadlineCharts.blog.com

1 - I think you do a great job with the charts, and often pull ideas on how to frame the data from your insights. However, I am not sure I would agree with your analysis of RSI for the TYX monthly chart. All it takes is shortening the interval to create an overbought condition at some point in the past 25 years. My understanding of RSI, taken directly from Wilder's book, is that the interval should necessarily be adjusted until you find one which works (i.e. gives overbought peaks and oversold valleys). I chart with that in mind, and it has worked quite well for me.

Perhaps my nit is neither here nor there, since your point with that 25y monthly chart of TYX is no less valid. The RSI is still contracting into a narrow central range, and even an adjustment to create one single overbought peak will not create any more than one. It could be argued that Stochastics are in the process of turning back up, which would be quite a positive divergence.

Fundamentally, I think it makes sense that long yields are rising at the same time that foreign banks are diversifying away from dollars. The current trend in long bond yields began at almost the same time that the dollar sold off near Thanksgiving. I think this is the most troubling set of trends that exist in the market today, outside of housing perhaps. But everyone knows that housing has bottomed, right? ;) (Comment this)