U.S. Bond Market Week In Review: The Long-Term Charts Are Still Showing A Rally

 In Bond Investing, Investing Idea

U.S. Bond Market

 

Submitted by Hale Stewart via Seeking Alpha

 

This will be a short column. However, I believe it’s important to note that the weekly charts of the treasury market ETFs remain in a long-term rally.

1.1.saupload_IEIW

 

1.2.saupload_IEF_20Weekly

The IEIs and IEFs have been in an uptrend since the end of 2013, making this a 2+ year rally.

1.3.saupload_TLHW

The TLHs rose in 2014, consolidated gains in 2015 and advanced to new highs in 2016.

1.4.saupload_TLT_20Weekly

The TLTs rose in 2014, dropped and then consolidated in 2015, and once again rallied higher in 2016. They are currently a few points from making a 3-year high.

Why is this important? Treasuries are a safety play; they rise when investors are concerned about growth. They also rally when there is little to no concern about inflation – which is usually a natural consequence of growth. The continuing rally in this market indicates some investors would rather buy an asset yielding 2.5% than take on the increased risk of equities. That is a very big problem.

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Sergey Sanko
Sergey had started an IncomeClub after years of being an investment advisor for high affluent investors and managing fixed income securities. He is the lead investment advisor representative and holds a Series 65 license. Sergey earned his Executive MBA degree from Antwerp Management School.
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