The Fed's recent cut left ammo on the table...

Looking at a Point & Figure chart of the 10-Year Treasury Yield (TNX) we are able to cut out all of the typical market "noise." What we see is that the TNX is "basing" above support at 3.2%.

In the most recent FOMC meeting, many in the market were expecting a full point cut, though the Fed only shows with a 3/4 point slash. That was smart, real smart actually. What the FOMC did was leave room for an impressive 1/2 point cut in the June meeting, stimulating markets into the summer.

While we may see a short-term rebound (call it a 'dust settling bounce) in the near-term, the TNX could easily go lower as late spring and summer ensues.

Exit is everything.

Mark Whistler

3/20/08