Treasuries Soar - Market Analysis for Dec 17th, 2008

The extraordinary near-vertical advance in the Lehman 20 Year T-bond ETF (AMEX: TLT) continues, as yield on both the 10 and 30 year Treasuries plummets. Let's notice that for the first time in what I consider to be the "blow-off" stage (since 12./12), the TLTs have gapped up, which technically suggests strongly that the price structure has entered the final phase of the incredible "parabolic" move. This is not to say that the TLTs cannot gap up every session for the next week -- but rest assured, this is the beginning of the exhaustion phase of the advance. If nothing else, the TLTs will be fascinating to watch in the upcoming sesions to see just how close the longer term Treasuries come to nearing zero yield.