Sunday, August 07, 2016

Treasuries (TLT): Had Enough?

Treasuries ETF TLT has, along with the wider market, had a fantastic run but the jobs report from this past week has introduced a 'wild-card.' Although I believe the market may continue to climb due to this robust and healthy economic indicator sign, investors may start to re-evaluate their stance towards T-bills which might begin to fall due to fear of an interest rise after last week's report is now being in the deck. In fairness they have had an unassailable ascent since early 2015 since the last retracement took place. Looking at the weekly charts one can see how far apart the EMA(13) versus the EMA(34) have become which can never be sustained long term.
On the daily charts we find a declining triangle which could break to the downside and EMA's appearing poised to bearishly crossover. I think this is a significant development as the EMA's have only crossed over bearishly twice since July 2015 (not including one false break below in April of this year). The reason I began paying attention to the bearish implications of Treasuries at the moment is that one of my favorite long-term indicators, MACD Hist (25,170,25), is just about to take it's first step below zero in three and half months.