Treasury Bonds Testing Key Support

• Posted by JC Parets
• on October 25th, 2011

If you’ve been reading Allstarcharts, you know I love my intermarket analysis. We trade equities for a living, but we want to know what bonds are doing to help us with our stock picks. Stocks and Bonds have been negatively correlated, so a further decline in T-Bonds is bullish for stocks (and vice versa).

Look at the line in the sand here for the iShares Barclays 20+ Year Treasury Bond Fund ($TLT). $113 appears to be the key level. Resistance in early September has become support at the 38.2% Fibonacci Retracement. Coincidence? Maybe – But the 50 day moving average is flattening out right here as well.

There is important support here but nothing has been broken. A bounce here is negative for stocks ($SPY) and a breakdown would be extremely positive in my opinion.

 

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

blog comments powered by Disqus