Why Bond Traders Are Excited

  • August 14, 2002
  • Paul Letourneau

“It’s the economy
stupid!” Is this what it has come to — quoting past slogans from presidential campaigns? Well, it is a fact the economy and lack of confidence in it is playing Devil’s advocate so far today. The only exciting market thus far is bonds, which are rallying as traders are questioning the health of the economy. The
Treasuries are continuing their strong uptrend on the heels of yesterday’s Fed
decision to hold interest rates. Some speculation in the bond market is
that investors, traders and portfolio managers are giving up on the US economic
recovery. The Sept. 30 year bond
(
USU2 |
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PowerRating) is trading positive and the
Sept. 10-year note
(
TYU2 |
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PowerRating) is rallying higher after yesterday’s
strong performance.

The S&P 500
(
$SPX.X |
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PowerRating)
has established its intraday high and low thus far on slightly bearish
internals. Look for support at 877 followed by secondary support at 873. Initial
resistance is at 885 with secondary resistance at 891.

The Nasdaq Composite
(
$COMPQ |
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PowerRating) is
trading on lighter volume and neutral internals. The intraday low is the
intraday support (1266) and the secondary support level is at 1260. Resistance
is at around 1278 and secondary resistance is at 1285.

Some of the stronger sectors on the day are: Storage, Retail
(
RLX.X |
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PowerRating),
Computer-Hardware, Internet, Biotech
(
BTK.X |
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PowerRating),
Software
(
$GSO.X |
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News |
PowerRating), and Boker/Dealer
(
$XBD |
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PowerRating). Weaker
sectors are: Paper
(
$FPP.X |
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PowerRating), Airline
(
$XAL.X |
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News |
PowerRating),
Defense, Drug
(
$DRUG.X |
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News |
PowerRating), Wireless, Lodging.

Amgen
(
AMGN |
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PowerRating) is forming a pullback
after its run up from its recent low. AMGN has a

3-month
relative strength rank of 97 from TradingMarkets.com.

Best Buy
(
BBY |
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PowerRating) is moving in a
counter trend rally on the daily chart. BBY is holding a


3-month
relative strength rank of 14 from TradingMarkets.com.

Apria Healthcare
(
AHG |
Quote |
Chart |
News |
PowerRating) is pulling
back from its recent high. AHG carries a

3-month
relative strength rank of 92 from TradingMarkets.com

Volume continues at a weaker pace with market internals generally neagtive.

Nasdaq Breadth

Adv: 1480 UpVol: 401705715

Dec: 1613 DnVol: 260482200

Net: -133 Net: +141223515

NYSE Breadth

Adv: 1387 UpVol: 25648020

Dec: 1730 DnVol: 43643617

Net: -343 Net: -17995597