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What Are US Treasury Bonds Trying To Tell Us?

  • Written by Syndicated Publisher No Comments Comments
    February 1, 2015

    US Treasury Bonds defied the experts last year, and continue to so far this year.

    A year ago it was supposedly a sure thing that bonds would plunge sharply when the Fed began cutting back its massive QE bond-buying program.

    But our technical indicators (not shown) said otherwise, that bonds had already sold off in 2013 in anticipation of the QE tapering.

    For awhile, the money flow and momentum reversal was showing clearly on the charts, ahead of the fundamentals as usual.

    But it was not clear where the buying was coming from that was more than replacing the Fed’s massive bond-buying program. As the year progressed it became clear that much of it was large global buyers seeking out a safe haven as their own currencies, economies, and bonds nose-dived.

    The pattern has continued this year, even though the Fed seems close to its next step in normalizing its monetary policies, by beginning to raise interest rates, which would normally be a significant negative for bonds.

    But as global risks have risen further, U.S. bonds have attracted even more buying.

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    However, have they become too popular, perhaps even dangerously overbought above their long-term 200-day m.a., higher even than at the worst of the 2008 financial meltdown?

    Or are they maybe saying we are in for a similar financial meltdown?


    To read my latest newspaper column click here:  Central Banks Want Inflation – They’re Getting Potential Deflation

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    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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