The disappointment of the UK Gilt market
03 September 2010
The Technical Trader’s view:
WEEK CHART
We have been one the bulls of the Gilt market, and have been disappointed by the market’s failure to get above and stay above the band of Prior Highs 124.95 and 125.58.
Some would argue that it is a band of such long-standing that the market would anyway have paused at that level, and while marking time, oscillated to include current levels at least.
But bears will add in addition that the impetus from the Bull falling wedge established throughout 2009 and completed in early 2010 has been exhausted.
Look closer.
DAILY SEP 10 CHART
In the Sep 10 chart the short-term bulls were alerted to the vulnerability of the market by the upper diagonal of the bull parallel channel.
That was good resistance.
And the pull-back in the Sep chart looks like a testing of the long-term support.
But that maturity is close to expiry.
DAILY DEC 10 CHART
In the Dec 10 chart, the technical situation looks more serious.
The market failed to penetrate the Pivotal band from Prior Highs –twice.
And on the very recent pull-back, the market has broken back through the June 2010 Prior High support of 124.49 with ease.
The Fibonacci support at 123.80 is relatively weak support, not at all strong enough we feel to support the multiple failures of the last six days trading…
The market is very vulnerable
Mark Sturdy
Seven Days Ahead
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