Interest rates have been coming down for a very long time now. The declining channel for the long bond is very clear. Someday this trend will change. I don't know when but I'm keeping a close watch:
Conversely, bond prices have seen an amazing bull run over the past 30 years. Every bull market is inevitably followed by a bear and a break of the lower trend line might be the first indication that the bull market in bonds is over:
Falling interest rates have helped make our currency less and less attractive over the past 30 years so while bonds saw an epic bull market the dollar has suffered. The recent pennant pattern suggests we might see another leg lower (continuation) before we finally see a bottom in the old greenback:
Finally to the stock market - back in the spring of 2009 I suggested that the 61.8% price and 50% time retracement of the bull market that ran from 1982 to 2000 would be an ideal spot for the bear market to climax:
Still, major resistance is right here, right now for the S&P 500:
The Dow is also hitting a long-term ceiling:
The key may be the financials. The Lehman Brothers collapse marks an epic shift in the financial world; we will never again see the financial powerhouses that dominated the last few decades. Will the banks be able to thrive again in a new form? My bet is they will but it may take a very long time to get there. Overcoming the "Lehman resistance" on the chart (below and the S&P chart above) would be a huge step in that direction:
I'm not making any predictions with any of these charts. I just look at them daily as I search for clues as to what may drive the financial markets tomorrow.
