Treasuries Update: Checking Up On 'Operation Twist'

By Doug Short: Note: Financial turmoil in the Eurozone continues to take the spotlight in financial news. But an important sidebar is the sharp decline Treasury yields. The 10-year note closed yesterday at another historic low of 1.63, as did the 20-year bond at 2.32. The 30-year, at 2.72, is 19 basis points above it closing low on December 18, 2008.

By Doug Short: What's New: I've updated the charts below today's close. The S&P 500 is at a new interim high of 1,521.38 and is a mere 2.8% from its historic high set in October 2007. The 10-year note closed today at 2.00%, where it has been hovering for the past three weeks. Many pundits expect the yields to move higher from here. But a healthy stock market correction could spoil those expectations.

By Doug Short: What's New: The big rally in equities yesterday was, predictably, accompanied by a rise in Treasury yields. Freddie Mac's weekly survey results, posted today, puts the average 30-year fixed rate mortgage at 3.55%, down 11 basis points over the past two weeks and just six basis points off the historic average low set in late July.

On September 21, 2011 in a Federal Reserve Press Release the Fed announced "Operation Twist" purportedly to drive down long-term rates and drive up short-term rates.

By Doug Short: What's New: I've updated the charts below through Thursday's close (February 21st). The S&P 500 has seen two days of selling and is now 1.86% off its interim high set on Tuesday. Many market watchers have been expecting a correction. But the yield on the 10-year note, which closed at 1.99%, remains where it has been hovering for the past four weeks. At this point the bond market isn't yet behaving as if the stock market were slipping into correction mode.

By Doug Short: I've updated the charts below through Friday's close. The S&P 500 is at a new interim high of 1,513.17 and is a mere 3.3% from its historic high set in October 2007. The 10-year note closed Friday at 2.04, which is the highest since early April of 2012. The historic closing low was 1.43 on July 25, 2012.The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 3.53 percent, 22 basis points above its historic low set last November.

By Doug Short: I've updated the charts below through yesterday's close. The S&P 500 is at a new interim high of 1,480.93 set yesterday, Jan. 17. The 10-year note closed yesterday at 1.89, which is four basis points off its interim high of 1.93, set on Jan.4. The historic closing low was 1.43 on July 25.

By Doug Short: I've updated the charts below through yesterday's close. The S&P 500 is at a new interim high of 1,480.93 set yesterday on January 17th. The 10-year note closed yesterday at 1.89, which is 4 basis points off its interim high of 1.93, set on January 4th. The historic closing low was 1.43 on July 25th. The latest Freddie Mac Weekly Primary Mortgage Market Survey puts the 30-year fixed at 3.38 percent, seven basis point above its historic low set in November.