Technical observations of RossClark@shaw.ca
On August 25th we put out our “Bye Bye Bonds” analysis pointing out the upside Exhaustion alerts for various terms (3-7 Yr, 7-10 Yr, 20 Yr & 30 Yr) on daily and weekly charts. In the case of the long bond this was only the eleventh time the daily Exhaustion Index had been that high since 1977.
Now that bonds have put in a lower high we can look for prices to step lower, finding possible supports from which to bounce at 128¼, 125½ and 123 (Fibonacci levels). Overhead resistance is deemed to be significant at 133. As can be seen on the following page the yield curve has been steepening; i.e. the greatest action is in the long end of the curve.
For Bob’s commentary on bonds we suggest listening in on today’s broadcast of the Bob and Phil show where they discuss bond vigilantes’.
Some inverse ETFs that provide opportunities in the sector are TBT, TBF & HTD.TO.
(Click on images to enlarge)
Yield Curve August 26th vs October 14th
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