Overbought and facing long term resistance. This does not mean it cannot go even higher or even more overbought, just be cautious as selling off can be fast if that ever happens.Also note that bond sold off does not necessarily mean stock's gain.
Similarities: . SPY/TLT death crossed. . TLT faces major resistance. If history repeats, expect: . TLT may go side way and range bound for some time (for a year?) . TLT eventually may spike to $150-160 range. . Continued decline of SPY. Also, based on the death cross of SPY/TLT, SPY might have peaked last December.
The TLT/SPX ratio has been a useful tool to anticipate market crashes in the past, and I'm seeing several signs suggesting a renewed risk-off period. This ratio broke a 28-month-long trendline in October after having hit its 2007 lows back in January. The 200-DMA provided support in November, leading up to the most recent market correction two weeks ago. The...
The rally in long dated US treasuries over the past 35 years could easily be called the greatest bull market we've seen in modern times. 10 yr rates have been trending down in a near perfect channel for almost 30 years. Calling for the end of this rally has become a popular pastime. Due to the nature being zero bound on rates, the upper trend line will with...
Above is a look at the 10 yr Bond prices relative to S&P 500. The purpose isn't to look for an exact top where prices or the ratio trend may reverse but instead to see where we've been in the past and where we are at currently. Breaks in the long term down trend of this ratio have lead to large moves in the SPY, however, determining those breaks in the trend are...
This is a similar chart to that published by Technician (see related idea below) that shows a clear divergence between stock markets and bond markets. I realize after making this chart that I had identified several bearish signals in bond markets at the start of the year, and I thought that we would thereby see a stock market correction in 2014. Stocks are the...
Very bullish if it can close the week above the red resistance, if that happens, $126 appears to be reachable.
Looks healthy. October reversal is concerning. Will start to worry if the red support line broke.
TLT right now is backing down from the red resistance. Blue lines may provide support. Note the well defined up trend channel and upward point 10 week MA. Concerns: weaker RSI, MACD and Stoch - all diverged. So It might be a good idea to trim some long position.
Classic example as to why you shouldn't listen to the sell-side & mainstream media...
Given the volatility in the bond market yesterday and today, technical profile did not change much, so stay course until market shows otherwise.
SPY/TLT shows the comparison of the price action of SPY and TLT. It looks like the money flows into TLT instead of SPY. This could be an important indication of future weakness of SPY, but is not a sure sign. This means that you could be fooled by this chart, but more caution is good advice here.
As of market close today (Friday), TLT broke out and TNX (10 year rate) broke down.
There were two instances of TLT cup and handle breakout that resulted sharp price spike (2008 and 2011), coincidental with SPY/TLT ratio breakdown. It has a similar setup right now. Can it materialize? I don't know, good to have this in mind and be ready to act if it does.
TLT bounced up from red support line, and I think it may retest the blue resistance in the coming weeks. Technical picture is mixed. One hand it is in an uptrend channel and has well defined supports, one hand it is below 10 weeks MA and has a negative MACD. If red support broken I would consider to short long bond via TBT or some other mechanisms.
TLT weekly lost 2 supports (blue lines) this week (pending close today), both RSI and MACD are weak. Potential rebound from 0.382 Fib, and the red support line. EMA ribbon weakening but is still OK.
This is a year-to-date chart scaled on a percentage basis that outlines the relationship between the US Dollar, 20 yr+ Treasuries, Gold, Energy (think oil, gas etc), the Euro, and the US Real Esate Index. These represent the different investment classes in the market (rate-sensitive instruments, earnings sensitive instruments, and hard assets). As you can see...