TNA Attempt

TNA indeed attempted to exceed the channel line in pre-market trading, then gave it up, returning to trade within the confines of the channel line and the rising trendline. The markets also moved sideways during the day, without good explanation why.

Unemployment was up to 9.4%, but the new jobs claims were well under expectations. Traders were expecting new claims with "5 or 6 handles," or in the area of 500K or 600K. Instead, they came in at only 346K.

Although no one has really keyed on this, it could have had more to do with the bond market, where traders are taking rates higher, thus bonds lower, in anticipation of higher inflation following rapidly on the heels of a recovered economy. Bond holders are, of course, sensitive to inflation because it erodes the worth of the bonds at maturity. Should the 10-year bond rate, closely related to mortgage rates, continue rising, financing and refinancing of mortgages will shrink as payments make it difficult to buy or of no-advantage to refinance. In other words, it threatens the continued recovery of the economy and promises Stagflation!

Late in the day, the 3-minute graph showed a potential bump-and-run bottom, with a breakout and retesting of the days downward trendline. Further progress upward was halted by the closing bell. Price target of a bump-and-run is calculated by the deepest excursion from the trendline being projected above the trendline at the breakout point. This is shown in the vertical lines on the graph, giving a target in the area of 32.80. That approximates the current level of the channel line being challenged.

The daily graph shows TNA is still walking the Bollinger band, so the fears of the day have not yet meant abandoning all hope and the end of western civilization.