Bond Reversal? Asks Market Timer Frank Kollar
December 7, 2007 (FinancialWire) (By Frank Kollar)
Bonds may have, after a huge rally lasting six months, reversed. If so, they could have a substantial decline ahead considering the speed of the rally leading up to it.
Two weeks ago TLT reached the 127% retracement of the entire two-year decline in bonds that ran from December 2006 into June 2007. It has been a huge run up but the rally reversed right at strong resistance, around TLT $96.00 a share.
A bond decline is not what traders have been expecting. With the Fed potentially lowering rates in coming days, bond sentiment is bullish. But though the Fed may cause bonds to move higher for a short time, the resistance at $96.00 will be tough to overcome. It is also a great place to cover short positions if surpassed on the upside.
Traders can take advantage of this decline by selling short the Ishares Lehman 20 Yr Bond ETF (NYSE: TLT).
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy holds a position in Ishares Lehman 20 Yr.
Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
Go to previous Press Releases & Trading Notes.
Note: These Press Releases are short term in nature. They may or may not reflect the same position as current subscriber reports which typically have longer time frames.
© Copyright 1996-2007, Kollar Market Analytics, Inc., All Rights Reserved.
FibTimer reports may not be redistributed without permission. These Trading Notes however may be distributed without permission.
Disclaimer: The financial markets are risky. Investing is risky. Past performance
does not guarantee future performance. The foregoing has been prepared solely
for informational purposes and is not a solicitation, or an offer to buy or sell
any security. Opinions are based on historical research and data believed reliable,
but there is no guarantee that future results will be profitable. |
