In the chart below, I highlighted a “VERY BULLISH HEAD & SHOULDERS” pattern in the long bond. (see post here)
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In the chart below, a MAJOR U TURN in the type of bonds to own looks to be is taking place!
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In the past, weakness in high yields and strength in government bonds suggested lower equity prices were in store. I highlighted earlier in the week that if the neckine was to break to the upside in the long bond, odds favored downside pressure in stocks. These trends are not long-term confirmed, yet important short-term changes look to be taking place!
Game Plan…We are long TLT, purchased it on support and am now going to lighten up on the exposure to high yields. We continue to own ETF’s in the equity markets that are attempting to score on defense.
Scott….Awesome work!!! A great example of how to use the “Power of the Pattern” to enlarge your portfolio!
Hi, Chris: just wanted to say thank you (again!) on TLT which I closed out my June options on yesterday with a 38% gain in a couple days. Will be looking to buy it back shortly… In on IWM this morning…
Hi Chris,
Looking forward to getting back into high(er)yields at some point in the future. Had to sell mine last Friday due to the pattern (break of support and 20-day SMA).
Looks like you have been hard at work the last couple days putting together some great graphs that convey tons of knowledge about the market. A picture is worth a thousand words.
Thanks,
cjk