Wednesday, January 6, 2016 2:56 PM EDT
Since maximum fear in the financial markets tends to create demand for safer-haven bonds, the chart of long-term Treasuries (TLT) should be helpful from a risk-assessment perspective. If stocks morph into a bear market in the coming days, weeks, and months, the odds are extremely high TLT will break above the upper blue trendline (toward the green arrow). As of 2:05 pm ET on Wednesday, January 6, TLT remains near a “possible resistance” zone.
We also must respect the possibility of a Fed-induced 1994-like event, marked by a selloff in both stocks and bonds. Bonds are one of many relevant inputs.
Disclosure: This post contains the current opinions of the author but not necessarily those of Ciovacco Capital Management. The opinions are subject to change ...
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Disclosure: This post contains the current opinions of the author but not necessarily those of Ciovacco Capital Management. The opinions are subject to change without notice. This article is distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. The charts and comments are not recommendations to buy or sell any security. Market sectors and related ETFs are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotations are not predictive of any future market action rather they only demonstrate the opinion of the author as to a range of possibilities going forward. All material presented herein is believed to be reliable but we cannot attest to its accuracy. The information contained herein (including historical prices or values) has been obtained from sources that Ciovacco Capital
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Bonds are in massive demand both in good and bad times as collateral these days, Chris. I am sure you know this but your readers could benefit: www.talkmarkets.com/.../fed-weakness-future-insatiable-bond-demand-with-short-supply