What the following chart means?
Sol posted a very important chart that has implications for all equities and economy going forward.br /br /Before I start, take a look at the following chart of TLT. (TLT is an ETF tracking 20yr treasury bonds).br /br /a onblur="try {parent.deselectBloggerImageGracefully();} catch(e) {}" href="http://3.bp.blogspot.com/_ZdctlOEsqMQ/SXk_61CAeRI/AAAAAAAABYY/9Su1ss1ZBiE/s1600-h/DC_Capital_01+Jan.+22+22.55.gif"img style="cursor:pointer; cursor:hand;width: 400px; height: 239px;" src="http://3.bp.blogspot.com/_ZdctlOEsqMQ/SXk_61CAeRI/AAAAAAAABYY/9Su1ss1ZBiE/s400/DC_Capital_01+Jan.+22+22.55.gif" border="0" alt=""id="BLOGGER_PHOTO_ID_5294333116851190034" //abr /br /You can see the breakaway gap from the other corner of your room can't you? That breakaway gap on TLT corresponds to the massive breakdown on $TNX. For those who dont know how these instruments move, they usually move in the opposite directions. $TNX is 10 year bond yield, TLT is a bond ETF. Although TLT is more related to the longer term maturity debt (20 year), it does move in the opposite direction of $TNX most of the time.br /br /Technically what the above chart simply implies that the bonds will soon rise as they test a longterm channel breakout that accompanied with a longterm breakdown on $TNX. This is a direct indication of deflation and implies that the current situation is nothing like you or your grandpa has seen before (Because of the importance of the breakouts/breakdowns on very long term scales). Such situation seen in Japan in 90s. If you want to know what happened to them, do a little research.br /br /One of the reasons I have been shifting away from my bullish stand for a bear market rally was this.br /br /object width="425" height="344"param name="movie" value="http://www.youtube.com/v/BSvFVIyRDgshl=enfs=1"/paramparam name="allowFullScreen" value="true"/paramparam name="allowscriptaccess" value="always"/paramembed src="http://www.youtube.com/v/BSvFVIyRDgshl=enfs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"/embed/object
