Bonds have drifted lower since the start of August. There could now be signs of acceleration.
One important feature on the IShares 20+ Year Bond ETF is the declining 50-day simple moving, now on the verge on the crossing under the 200-day SMA. A “Death Cross.”
Next is the downward channel in place since early September. TLT failed at the top line yesterday and is just coming off it today.
Third is the double-top around $172 between late April and early August. This followed a blow-off spike in early March that’s never been regained. Viewed together, this kind of price action suggests a potentially major long-term top.
Bonds have benefited from this year’s coronavirus pandemic. But how long will that support remain? Monday's ISM manufacturing report and today’s non-farm payrolls showed the economy is improving. The election might not be resolved yet, but fiscal stimulus grows more likely the closer we get to January. Those trends would argue in favor of higher yields and lower prices.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Absolutely nothing fundamental is driving yields up, the exact opposite actually. What’s pushing them higher for the time being is record amounts of speculation. Not even just record, by far the largest position in history, shorting long bonds, betting that JPow is right. The economy hasn’t even had half a recovery and Europe’s already entering a double-dip. The offshore financial system is eating up the speculation happily, but as soon as a tiny shred of reality hits the people being duped by the Fed and Central Bankers this whole thing is going implode
tomolovegrove
⋅
@kaxo1, My bet is that the squeeze starts next week. Look at the volume over the last few days someone big is buying. The big boys also probably deliberately let this death cross happen so silly retail traders like this person pile on and short the bond market more thus giving them more fuel for the bond rocket ship.
@T-r-X, Yeah same. Got some TLT call options that will hopefully give me some good returns. I do not understand how you can be so stupid to short bonds when QE is around like seriously how do so many people not understand it.