Just a quick one this time. Price has a way of being drawn to significant support and resistance areas. What happens once it gets there often provides useful and important information about what comes next. So keep a close on the long-term treasury.
Overall it seems like most investors have adopted the “interest rates are now rising so I better get used to it” mode of thinking. And there is good reason to believe it. But in the financial markets, nothing (I actually mean – zip, zilch, nada, ninka, squat, nothing!!) is ever guaranteed.
As you can see in Figure 1, the long bond (using ETF ticker TLT as a proxy) is nearing an important “line in the sand” as I type.
Figure 1 – Ticker TLT with a long-term “line in the sand” (Courtesy AIQ TradingExpert)
Now here is where a skilled market analyst would discuss in depth why the bonds are, a) set to break out to the upside, or b) sure to bump up against resistance and be repelled. Alas, I don’t know the answer.
Here is what I do know: We are quite likely about to learn a lot about where bonds are headed next very soon.
So keep a close eye on TLT.
Jay Kaeppel
Disclaimer: The data presented herein were obtained from various third-party sources. While I believe the data to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information. The information, opinions and ideas expressed herein are for informational and educational purposes only and do not constitute and should not be construed as investment advice, an advertisement or offering of investment advisory services, or an offer to sell or a solicitation to buy any security.
