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.
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J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He earned the Chartered Market Technician designation (CMT) and is a member of the Market Technicians Association. More
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