Treasuries Can Keep Rising

The ratio chart of the iShares Barclays 20+ Year Treasury Bond Fund, $TLT, against the Reuters/Jefferies CRB Index, $CRB, over the last 10 years shows 4 very distinct areas. There are two long sections where the $TLT and $CRB have been correlated and moving higher and then there are two orange areas where the they diverge when the ratio has skyrocketed. In these areas the $CRB has fallen and the $TLT has its best performance. We are in one of those areas now. As long as it continues the $TLT is free to continue higher. There are signs that turn may be coming, but nothing solid yet. Keep an eye on the $CRB for a turn higher as another sign of when the $TLT might come back to earth or at least stop rising.

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