Daily Blog - Tiger Software

                              June 27,  2007

Watch the 2-year Treasury Notes (TU1620):
Two-Year Notes Call The Tune for Housing and Finance Stocks.

   William Schmidt,     - Tiger Software's Creator
   (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

   No reproductions of this blog or quoting from it
   without explicit written consent by its author is permitted.

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   to william_schmidt@hotmail.com

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     Wednesday - June 27, 2007  

               Watch the 2-year Treasury Notes (TU1620):
Two-Year Notes Call The Tune for Housing and Finance Stocks.

      Traders should watch the 2-year Treasury notes.  Many stock groups rise
      and fall in synch with short-term interest rates rates.    I present data here to show
      how substantial the declines in just a month are for home-building and finance
      stocks when the Treasury Notes turn significantly weak   

           Below is the chart for the year note's perpetual contract for 2-year Treasury
      Notes,  as created by Dial Data.

           Keep in mind that as the 2-Year Treasury Notes rise in price interest rates
      are falling.  In the chart below, you can see that there had been a rising channel
      of prices until mid-May,  That is when the chart broke out of the bullish uptrend.
      And that is when Utility Stocks, Housing Stocks, Finance Stocks, Real Estate
      Investment Trusts, The Dollar, Gold  and Bond Funds have started to weaken. 
      As they weakened, the US markets turned soft.  And the NYSE Advance-Decline
      Line turned down and the number of new lows start to rise sharply.
           Tiger Software users can watch this chart and allied charts closely.  The dip
      of  the Tiger Accumulation index in on April 10th to a new 12 month low was an
      early warning that this instrument, and all the investment vehicles tethered to it, would
  Note the trend-break of this vehicle's uptrend was on 5/24.

wpe6D3.jpg (50197 bytes) 

Here are the charts of some of the investment vehicles ompacted by the change
  in trend of short-term interest rates. 
Recall from above that the trend-break of the
  Two-Year Notes was on 5/24.  Housing stocks are, by far, the quickest to react.

                   Utility Stocks: XLU (Utilities' ETF) fell from 41.08 to low of 39. Now 39.34
                   Housing Stocks   Tiger Index of 31 Housing Stocks fell from 355 to 302 with today's close
                                           5/24          6/26
                             HOV     25.81       17.48      
32.3% decline
                             MTH     35.00        28.02    
19.9% decline
                             BZH      35.35        28.54    
19.3% decline
                             LEN      45.87        37.86    
17.5% decline
                   Finance Stocks 
                                           5/24         6/26
                             CLAY    15.96      11.20     
29.8% decline
                             PVTB     33.03      27.01    
18.2% decline
                             MTG      65.20      57.90     
11.2% decline
                             LEND   14.68       13.06     
11.0% decline
                             MER       92.61     86.26      
6.5% decline

                   Real Estate    IYR (Real Estate ETF) fell from 80.72 to a low of 76.5 and
                                        rallied to 78.87 today.
                   Real Estate Investment Trusts VNQ (REIT ETF) had already formed bearish head and
                                           shoulders pattern.  It fell from 74.12 on 5/24 to 70 before reversing today.

                                         5/24         6/26
                   Euro                134.60      134.80   This topped out on 5/1 at its upper Tiger Regression channel.
                   Br. Pound       198.57    199.57   (It will take more than talk by Fed of raising interest rates to
                                                                      strengthen the dollar versus the British Pound.
                   Gold               64.75         63.76
                   Silver Stocks
                            PAAS    26.34       25.66
                            SSRI      36.10       34.11
                            NEM      39.45       38.71
                   Bond Funds.
                            LQD        106.22    104.08       Shares GS $ InvesTop Bond Fund
- Biggest Bond Fund. -
                   Our Nightly Hotline ($295/year) examines these charts and points out the inter-market
                   relations.   HOV, show below, was picked as a short sale on our Hotline.   TigerSoft makes
                   the business of profitable trading very easy.

    wpe1E.jpg (66892 bytes)

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