After a stark sell-off of treasuries today, banks are buying them again on news of tightening interest rate spreads. It's beyond me why anyone would be willing to own treasuries long-term. I think most are buying them for the same reason that I am -- making money on the margins on the interest rate fluctuations. I would never hold them for the interest because I would be losing money to inflation.
Stocks, after opening nearly 350 points higher at the open, have erased the majority of the rally, but are still in triple-digit positive territory.I am reminded of something I read in Chick Goslin's book, Trading Day By Day. He says that in an existing trend, news-related shocks to the financial system tend to have short-lived impacts. Eventually, the underlying fundamentals turn the market back into its original trend path. In other words, the market eventually reverses the reversals!
