Monday, August 31, 2009

TLT- Bonds Update



It's been awhile since I wrote about the bonds so I figured today would be a good time for an update. My last post on the bonds was on May 14th and if you recall I was looking for a seasonal low to establish itself. Over several decades, the bond market has shown a strong tendency to bottom out during the month of May or June and this is exactly what happened this year.

TLT made its low on June 10th 2009 and has not looked back since. The stochastics gave a buy signal weeks ago when the oscillator turned up and rose above the 20 line. As you can see in the lower chart, TLT is right now testing resistance at 97. If this market can break through this area, we will have a 3 month high which is something we haven't seen for quite sometime. The original post can be found here by clicking on this link.

3 comments:

Anonymous said...

TLT & GLD surely both can not go up at the same time..deflation/reflation trade...

steveplace said...

I'm following the same thing, if we get a break of those levels, I feel that a run to 100 would be a reasonable area. I put my ta up here: http://bit.ly/TLTbreakout

steveplace said...

TLT and GLD can go up at the same time. It's the risk-aversion play and could change the correlated dynamics of the market.

For example, John Paulson is loading up in GLD and Dollars, seemingly contradictory except when you view it from a different theme.

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