Posts Tagged ‘Fund Symbol’
Bond Model: Sell Signal
Sunday, July 15th, 2012
by Guy Lerner, The Technical Take
Our bond model has issued a sell signal.
The bond model is based upon intermarket variables including inputs from commodities and utilities. The model first issued a buy signal on March 30, 2012. Since that time the Vanguard Total Bond Market Fund (symbol: BND) is up 1.9%. This ETF also closed at a new all time high on Friday. The i-Shares Lehman 20 + Year Treasury Bond Fund (symbol: TLT) is up 15% since March 30, 2012. The out performance of TLT is thought to be due to Operation Twist, as the Federal Reserve has been actively buying at the long end of the yield curve to push down interest rates. From March 30, 2012 to July 14, 2012, the SP500 loss 3.7%.
It has been my contention that the buy signal back in March was an early sign of economic weakness. This has turned out to be the case over the past 3 months as important data inputs, like ISM and unemployment, have been softer than expected. I don’t believe we are in recession (personal data), and at best, the US economy has stabilized with growth being below trend.
From a technical perspective, TLT looks like one of the best charts in my Chart Book. See figure 1, a weekly chart. Price must remain above the 128.52 key pivot point (support level) to avoid being a double top. Considering that our fundamental model has issued a sell signal, I would suspect TLT will struggle going forward.
Figure 1. TLT/ weekly
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Tags: Bnd, Bond Fund, Bond Market, Contention, Data Inputs, Economic Weakness, ETF, Federal Reserve, Fund Symbol, Fundamental Model, Guy Lerner, I Shares, Lehman, Personal Data, Pivot Point, S&P500, Technical Perspective, Tlt, Year Treasury Bond, Yield Curve
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How Many Times Have We Heard That This is the Death of Bonds?
Friday, June 1st, 2012
by Guy Lerner, The Technical Take
I know they don’t move much, but in these turbulent times, just getting your principal back from an investment is a winning proposition. I have been bullish on bonds since March 30, 2012, and at the time, I suggested that this was an early sign of economic weakness, and on April 23 I wrote: “A topping equity market appears to be a sign of an economy that has peaked as well. This has been heralded by strength in bonds. Most likely, this is signaling further quantitative easing as the Federal Reserve intervenes in the bond market to prop up the economy and the equity markets.“
So fast forward to this week, and we note the following. The calls for the death of bonds has been pre-mature. Once again! How many times have we heard this over the past several years? Yes, they are boring, and yes, the market is very distorted courtesy of the Federal Reserve. But since April 30, the Vanguard Total Bond Market ETF (symbol: BND) is up 1.42% while the SP500 is down nearly 7%. The i-Shares Lehman 20 + Year Treasury Bond Fund (symbol: TLT) is up nearly 13% in this time period. Of course, hindsight being nearly 20/20, this suggests the Fed is continuing its purchases at the long end of the curve, and in all likelihood, the next round of quantitative easing will target these maturities as well.
For the record, figure 1 is a weekly chart of the TLT. Note the breakout to new all time highs. Even to the equity bulls this must mean something. Right?
Figure 1. TLT/ weekly
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Tags: All Time Highs, Bnd, Bond Fund, Bond Market, Breakout, Economic Weakness, ETF, ETFs, Federal Reserve, Figure 1, Fund Symbol, Guy Lerner, Hindsight, I Shares, Lehman, Likelihood, Maturities, S&P500, Tlt, Turbulent Times, Vanguard, Year Treasury Bond
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