- December 14, 2020
- Posted by: virtualxstore
- Category: trading
First and foremost is the recent double-bottom on the iShares 20+ Year Bond . We cited downside in this instrument twice as it hit the top of its channel. But it made a slightly higher low/double following the last drop. That could suggest the intermediate-term downtrend, in place since August, has run its course for now.
There are also some potential positives for bonds as coronavirus cases and jobless claims rise. Even with a vaccine coming, the near-term employment picture is grim because restaurants and hotels appear to have maxed out their rehiring for now. Recent data from the Labor Department suggests they could start bleeding jobs again.
Second, there’s the meeting on Wednesday. Officials have indicated they want to start buying longer-term Treasury bonds, which this holds. Incremental mention of the new policy could help boost TLT .
Third, TLT just had a inside week, which means its range is tightening.
Next are the intermarket conditions. Oil rallied on reopening hopes and the vaccine news. That could have been “buy the rumor.” Now that Pfizer’s shipping its drug, will investors “sell the news?” The fundamentals on oil haven’t been great either. OPEC+ has achieved little in terms of lasting production cuts. Inventories have also been higher than expected for several weeks. (Last week EIA’s total rose by 15.2 million barrels, the biggest increase since April.)
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