6 March 06

The Ten Year Note and Thirty Year Bond Terminal Tidal Wave On-The-Edge
 Growth Fractals

The debt market like all asset markets is a cash flow dependent growth and decay
process operating in terminal exquisite fractal patterns. Just like
the composite equity market with its very distinctive daily fractal
pattern along the final edge of the terminal crest of a senescent
tidal wave that has been slowing building for 148 years, so too is the
long term debt market with its finale last most and topmost
along-the-edge fractal activity.

Most technicians recognize yesterday's finale exhaustion gap for the
long term debt instruments. Buying debt instruments, just as with the
buying of all asset classes, transiently becomes saturated and
disappears at regular fractal intervals - interest rates then
increase,  buyers return and reenter the market, and  interest rates
are driven lower by competition.

26 October 2005 gapped higher and began the final crest for the long
term debt instrument tidal wave for TNX and TYX.  The deteriorating
fractal growth pattern along the endmost crest was/is 16plus/41/33 of
probably 33 rather than 33-41. 6 March TNX's and TYX's  exhaustion
gaps were a good contrarian  buy for the long debt instruments.  Ideal
fractal theory would take interest rates lower for the next 1.5-1.6
times the base of 16-17 days or for the next 24-25 or so trading days,
matching the expected devolution of equity valuations.

The wobbly fractal growth pattern along the nth stage of the tidal
wave's final crest for the equity composites was completed as posted
in the previous EF note. The deluge for all asset classes is awaiting
in the ante room.....
Gary Lammert