Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, December 28, 2015

TLT Approaching Another Test of its Year Long Downhill Channel

The TLT 20 year Bond ETF, the 800 lb gorilla of the bond world, continues to trade sideways but very slightly uphill as it approaches another breakout test of its year long red downhill channel. 

click on image to enlarge

On its weekly chart, the lower chart, it is unclear whether the TLT is going to have to fall a little further and get the support of its uphill blue channel and the mid line of its uphill black channel before breaking out.  In a world expecting rising interest rates that a drop to stronger support seems plausible.  Traditionally however, the bonds have been the place to hide once the stock market becomes unfriendly.  Statistics have shown recently however, that more people are going to cash than are going to bonds because the bonds may not be the no-brainer play for a declining stock market this time.  You could argue that these recent failures to break out at the red line represent the weak stock to bond transition we are experiencing.  

Trade well my friends


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