Strong Treasuries

Largely lost in the drama this week was the rally in long bonds. On Friday, 10 yr Treasury yields hit a new low for the move.

Technically, it appears that a two month head and shoulders pattern has resolved lower.

Bonds could be strong for a number of reasons. One is that bond market investors are not very concerned about a default or about a US credit rating downgrade (otherwise bonds would be selling off). Another is that investors are seeking safety in the midst of domestic and EU fiscal turmoil.

Of course, an alternative view is that domestic bond markets have been so manipulated that no interpretation is possible...

no positions