MBS Day Ahead: When Moving Averages Converge!

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Posted To: MBS Commentary

I received an interesting question yesterday as to whether or not there was any significance in the fact that 25, 50, and 100 day moving averages are right on top of each other on the 10yr Treasury chart. I'm not too shy about saying that I think moving averages are tremendously overblown in terms of their predictive value. But to be fair to moving averages, I would say the same thing about almost any piece of technical analysis. After all, if there were truly a magic decoder ring that allowed a trader to reliably predict the future with better than random accuracy, everyone would soon be using the same tools and the competitive advantage of the unique approach would cease to be an advantage. No, at best, technical analysis is a complement to a diverse arsenal of analytical approaches….(read more)

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