I am seeing some interesting dynamics in the ETF's that track the treasury markets, and specifically a yield steepening event looks to be underway. First the low end of the curve.....
Not much going on here, and no indication the trend will break in any direvtion. However, lets look at the long end of the curve. Below I show the the Poweshares 20+ year ETF (ticker tlt) and its short equivalent (ticker tbf).
What is interesting in these charts is the price/volume charactrristics. First the TLT is showing signs of breaking down, noting that the price of the fund has broken the September low on somewhat elevated volume. This while the MACD, RSI, and money flow metrics are breaking down. More interesting is the chart of the TBF. The price of the is gaining strength while volume is on the up swing. I also note that next high volume region on the TBF is the March 2012 high, where there is a gap in the price. Gaps have a tendacy to be filled and this along with the price/volume setup makes me think it will occur sooner rather than later.
Not much going on here, and no indication the trend will break in any direvtion. However, lets look at the long end of the curve. Below I show the the Poweshares 20+ year ETF (ticker tlt) and its short equivalent (ticker tbf).
What is interesting in these charts is the price/volume charactrristics. First the TLT is showing signs of breaking down, noting that the price of the fund has broken the September low on somewhat elevated volume. This while the MACD, RSI, and money flow metrics are breaking down. More interesting is the chart of the TBF. The price of the is gaining strength while volume is on the up swing. I also note that next high volume region on the TBF is the March 2012 high, where there is a gap in the price. Gaps have a tendacy to be filled and this along with the price/volume setup makes me think it will occur sooner rather than later.
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