Sunday, March 25, 2012

Bonds are going down long term

The chart above is for TLT, which is a treasury bond ETF.  Investors buy treasury bonds when rest of the market is in trouble. Since investors have been moving to the stock market, treasuries have come down gradually. As you can see , TLT has solid support at the up trend-line, where it has stopped many times over the years and i guess it will stop again at that line. (If it ever falls below that line, you can kiss good bye to low interest rates for a long time. It could happen if inflation some how gets to a very high level, like in the early 1980s.). Not sure how long it will take for the TLT to come down and meet the trend-line. This is one of the reason i'm bullish on the stock market in the long-term.
possible trades: Short TLT  or long TBT (inverse ETF)

Disclaimer: The information on this blog is not a recommendation or solicitation to buy, sell or hold any security. This blog is strictly for informational and educational purposes only.

Saturday, March 24, 2012

Market to Sell-Off and Consolidate

The Market has been going up with out a major sell off in the past 3 months. I think it's time for a pullback and consolidation. As the chart shows, the S&P500 will be hitting the up trend-line pretty soon and it might rally from there or go below it. I think the  Market will be weak for the next couple of months, but not sure whether it will go down a lot too. We have to see how it consolidates here and whether it will create to a pattern to go up or down (My long-term prediction is the Market could go to 1500 area in the second half of the year, but there's no guarantee for that too). Once we Sell-off and consolidates i will post where it will be going next.