Bonds Are Debating Risk on vs Risk Off

The risk on risk off trade is again at a testy point when measured with the ratio of the iShares Barclays 20+ Year Treasury Bond Fund, $TLT, against the SPDR Barclays High Yield Bond ETF, $JNK. A move in the direction of $TLT, higher triggers a break out of a bull flag with a target of 3.49, near the bottom of the October gap. The volume run up on the current move supports that and the Moving Average Convergence Divergence (MACD) indicator is positive with a Relative Strength Index (RSI) in bullish territory. Look for a move over 3.25 as the trigger higher. Risk off. But this ratio is also getting extended from the Simple Moving Averages (SMA) and that bullish RSI is in technically overbought territory. A move under 3.17 breaks the flag lower with a target of support at 3.04. Risk on. So which will it be?

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

blog comments powered by Disqus
Dragonfly Caps Blog