Bonds are Hot but is Oil Hotter

• Posted by Greg Harmon
• on November 17th, 2011

Treasury Bonds have been in rally mode since August and still have not given up the uptrend, but Crude Oil has decided it does not want to be upstaged by bonds. Below is a ratio chart of the United States Oil Fund, $USO, against the iShares Barclays 20+ Year Treasury Bond Fund, $TLT. This ratio fell hard in August and has been bouncing around under resistance of 0.33 since. But

Wednesday it took a peak over that resistance. With the Bollinger bands moving higher, the Relative Strength Index (RSI) trending higher, and the Moving Average Convergence Divergence (MACD) indicator positive and having halted its fall, it may be ready to break higher. It will need to overcome the Doji Star that printed Wednesday, signaling a potential reversal lower, but a positive move Thursday sets up a move towards the previous support, now resistance, of 0.37 at least, with 0.42 as resistance above that. Yes Bonds are hot but it loos like Oil is getting hotter.

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