T-Bond Update

T-bonds have declined around 8 percent since October 14th when we exited our long positions.  They are probably due for a bounce from the current area.  The Fed still has four months of buying in front of them.  On the other hand this is not a buy and hold area.

The uninterrupted rally in socks since September 1 on QE2 and the tax cuts is rather long in the teeth and while defying technical levels still has its support base well below current levels.  The 1070 to 1290 S&P range for the next 18 months that I mentioned recently still holds.  Obviously, market traders feel confident that they will get some warning as to when to get out.

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