Crude Oil gives bullish signs

Daily chart says it all:

RSI trending up.

DI & MACD both gave bullish crossovers.

Since the test of the 200-DMA at $68 Crude is 12% and solidly moving in a tight trend channel.

I included an interesting trendline which however gives a warning signal. I will be looking for a close above it for a confirmation of the Bullish scenario.

US Treasury Bonds Selloff - follow-up call

I was calling a UST bonds selloff 2 weeks ago

I'm happy I made that call right on top of the market and it did selloff after it. I didn't have position so it is only an intellectual satisfaction with my analysis.

After yesterday FED raised the Fed borrowing window to 0.75 bp it makes sense to think on the aggregate intelligence of the market - seems markets were anticipating that move so they started creeping higher 2 weeks prior to the actual news was released.

2 / 10-year bond spreads are signalling a possible steepening which is bullish for the economy.

While on dailies the moves are pretty rangy the Weeklies have strong signals on technical indicators as well as inside the trending channel that the spreads is moving toward steepening.

10-year UST Note yiled bounced off the 3.60% support and is moving higher with first target/resistance around 3.85/89.

10-year UST Note has an immediate target around 116.90 with further focus on 116.50.

T R E N D

EUR/USD since Dec 2009 is in trend.
here's the hindsight 'wisdom':

1.51 > 1.35 = 1600 points with only a slight bear flag consolidation between the 2 trend legs.

legendary traders like Soros say 'in the end only trend-followers survive' and Ed Seykota also holds this view with a great attention to holding to trend positions and especially against the daytrading..
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now my personal experience with trading with the prevailing trend and going for the 'easy' contra trades is that when trading along the strong /trend side - trades usually unfold easy and I'm quick to take profit and leave a big part of the move...

then I make some in contra trades but they usually are nerve consuming - need quickly to take profit since the reversals are very fast and might wipe the whole profit in 1to 4 hours bar and one has to be smart in scaling-in.
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trouble for me has been I'd make some profits in congestions as with contra trades it's easy to pick a side and enter with tight stop beyond the range end - that however is tricky as I went 4 times yesty and got stopped every time since I was going against the 'freight train' - another popular adage..

the problem with trading the prevailing trend/strong side is when the move has begun most are uneasy to jump as the risk is hard to define and one might be jumping in the end of leg/move.
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it's not an easy task but however I'd make this extra effort and will focus now exclusively in picking my spot in trading with the prevailing trends and will resist in going for contra trades - I write it here as a reminder for my personal decision.

Markets in a state of Trend - ETF snapshot

Crude oil spikes higher above the 50-DMA and the current range bound trading prevails.

Looking at the futures if we take out $78 then $84 comes in focus - the bounce off $70 level was quick and it leaves me watching the price asking myself if this is the next leg up or squeezing the weak shorts.

iShares iBoxx $ Invest Grade Corp Bond - Yields are historically low and the Diamond top pattern confirms in my view a possible selloff in corporate bonds. At some point bond vigilantes will come out and start punishing the bond issuers for the huge debt accrued and for the low returns on its unproportionate risk.

SPDR Barclays Capital High Yield Bond - Junk bonds broke the uptrend and I assume it confirms the scenario of rising yields already starting to happen.

US Treasury bonds are trending down - another confirmation that the inflationary trade and rising yields is actually in progress.

PowerShares DB Agriculture - it looks like an equilibrium right at the 200-DMA and a the center of the range channel. Let's see if 50-DMA holds but still we need to break away from this channel for any meaningful trend to be confirmed.

Silver is developing a large symmetrical triangle pattern. The bounce higher will meet the tough resistance at $16.

Gold uptrend hasn't been damaged so far by the liquidations in the last 2 weeks. The Bullish wedge confirms continuation so far.

ELEMENTS Rogers Intl Commodity Metal ETN - 50-DMA is pivotal to the present development. So far the 200-DMA held the plunge and I'd like to see how Metals will fare around the present resistance level.

S&P - "keep doing until no longer works"?

Just ow resilient are the Emerging Markets to the local financial crises like Dubai and Greece? Keeping the uptrend intact and developing into expanding triangle EEM will also need to take out the 50-DMA to keep its move. A failure puts again the 200-DMA support in focus.

US Dollar is correcting but uptrend is still intact.

The Nature of Trend-Following

Stig-ostgaard - On the Nature of Trend-following

ED SEYKOTA - 10 RULES FOR POSITION SIZING

Ten rules for position sizing:

1. Bet high enough to make meaningful profits when you win.

2. Bet low enough so you are ok financially and psychologically when you lose.

3. If (1) and (2) don't overlap, don't trade.

4. Don't go adding a bunch of rules that don't work, just so you have ten rules.

10-Year US Treasury Notes - Sell!

UST 2/10 Year bond spreads are further flattening which usually has bearish implications for the economy.

10-Year Yields are at an important Resistance turned Support above 3.60%.

Trend is supported by the 50-DMA, however the reversal pattern suggests further downside is possible.

10-Year UST Notes are a Sell now that they hit the central balance point of the last 2 swings.

Trading below the 50 & 200-DMAs with falling RSI and MACD about to give bearish crossover Notes are a sell until we see a close above 118.

10-Year yields bounced off the former Resistance turned Support at 3.60 and are heading for the recent 3.85 highs.