Are T-Bills Signaling A Dovish Fed?
Mike Paulenoff | Jun 15, 2015 02:41PM ET
The juxtaposition of the iShares 20+ Year Treasury Bond (ARCA:TLT) and its daily, RSI-Momentum Gauge at the June 11 low suggests strongly that the TLT recovery rally from 115.26 is only partially complete at Monday's high of 119.06.
My work argues for additional counter-trend strength into the 123.50 to 124.00 area -- equivalent to downside continuation into the ProShares UltraShort 20+ Year Treasury (ARCA:TBT) -- to the 46.50 area from current prices around 49.60).
With the FOMC policy statement and Yellen's press conference Wednesday afternoon, if my scenario continues to emerge, the bond-market's reaction to whatever the Fed decides to say or do will be positive -- i.e., will drive yields lower, bond prices and TLTs higher.
If the technical work is telling us to expect higher TLTs (lower TBTs), then Yellen & Co. is likely to back away from -- find excuses to delay -- the forthcoming rate hike for a while longer.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.