Bond Rally Here Sends Bearish Message To Stocks
Chris Kimble | Jan 27, 2021 10:28AM ET
Bonds have experienced a large percentage decline since the highs of last March. Have bonds fallen enough?
If they rally, could they be sending a bearish message to stocks?
This chart looks at iShares 20+ Year Treasury Bond (NASDAQ:TLT) over the past 20 years. TLT has created a series of higher lows and higher highs inside of the rising channel (1). An upside breakout took place last year as stocks started tanking in late January, as news of COVID started taking place.
The large decline in TLT currently has it testing the top of the channel, which now comes into play as support at (2).
A breakout by TLT at (3), would suggest that bonds push higher and it could be at the expense of an important decline in stocks.
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