TNX: interest rates on the rise?

thumb_10.9.09_index_tnx_w_--_10_year_t-note_inter_rate_cboe_In what could be a major turning point on the interest rate landscape, TNX hit 50% of the bear market at 3.18% and bounced sharply at week's end to close at 3.384%. Further confirmation was the almost exact low at the 50 week moving average (chart). Home loans with variable rates could be adversely affected in the coming weeks. As for equities, money flowing out of bonds is usually helpful. Bernanke's pep talk on Friday was a clear attempt at staving off a dollar meltdown after Thursday's rout. What is interesting to note is that even with the dollar bounce on Friday, equities held their own, a decoupling of the March rally trade. Either no one really believes that the dollar rally is sustainable, or we are seeing the early stages of a tightening cycle trade. It was also the Friday before option expiration week, so we will need more confirmation. Nevertheless, the bearish dollar trade is extremely crowded and a short covering rally could last a lot longer than just a day.