What About Sagging Bonds

What About Sagging Bonds

Dragonfly Capital  | Jan 11, 2019 08:15AM ET

It started with pants. Guys started to pull them down exposing their underwear. Sagging pants they called it. It became a cultural thing. You saw it everywhere. Stories appeared with kids unable to run away from police as their pants kept them from moving their legs.

Then the backlash hit. Bans on sagging pants. The city of Flint Michigan even instituted a law banning sagging pants with the penalty of a fine or jail time. Maybe Flint should have been focusing on other things. It did nothing to stop the phenomenon.

And now it is hitting the Bond market. Just a week ago Bond prices were near a 52 week high and clearing long time resistance. But since then prices have been sagging. Thursday the US Treasury Bond ETF (NASDAQ:TLT) broke below its 20 day SMA. This was the first time that had happened since mid-November.

TLT Daily Chart

With the long red candle Thursday a strong down week looks guaranteed. The Friday morning pre-market activity is showing a weak bounce. Will it build into a a strong one and create a bottom? Or was this move to new highs just a retest of the break down zone before a prolonged move lower?

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Original post

Dragonfly Capital

Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

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.

English (UK) English (India) English (Canada) English (Australia) English (South Africa) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes