Archive for the ‘Chart of the Day’ Category

Texas Is Tops

This should not come as a surprise.  Texas wrapped up 2017 with the fastest-growing economy in the U.S:

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Hat tip WSJ.com

Bonds Break

tlt

The TLT(20+ Year Treasury Bond Fund) took out major support today.  The index closed at its lowest level since July of 2015.  More downside, considerably more downside, could lie ahead.  The TLT has a long way to travel before reaching oversold levels. 

We are long TBF and TBT(Ultra-Short 20+ Year Treasury Bond Fund) in some managed accounts.  Both of these inverse funds have performed quite well as the bond market has sold off this year:

tbt

 

SP500

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Record High Spread

Interest rates have certainly been a focus of late, and for good reason.  Here’s an interesting stat:  The spread between the 10 Year US Yield versus the 10 Year German Yield is at a record:

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US 10-Year Yield: 3.08%

German 10-Year Yield: 0.64%

Spread at a record high: 2.43%

As always, great stuff from Charlie Bilello of Pension Partners

The Long End Continues To Hold Major Support

tlt

The TLT(20+ Year Treasury Bond Fund)has been under intense pressure this week.  The index began to weaken on Monday before getting slammed yesterday.  This high volume breakdown drove the TLT back down to a major support zone that has held up extremely well over the last few years.  The $116.50 to $117.00 area marked major lows in 2016 and 2017 as well as the February, April and May lows this year.  The steady pressure so far this year has certainly softened up this key zone but until this area is convincingly taken out it should be given a great deal of respect.  A close below $116.00 would do a great deal of damage. 

tyx

The inverse of the TLT action is the TYX(30 Year Treasury Yield Index).  This index has not been able to convincingly clear 3.2% since the summer of 2015.  The 2015, 2016, 2017 and multi-month 2018 highs have been capped by the 3.2%-3.25% area.  This zone is weakening as well this year as pullbacks from heavy resistance become less deep.  Until cleared 3.25% should continue to be respected as major resistance.  A TLT move below $116.50 would likely drive the TYX to new multi-year highs. 

At time of publication we do not have a position in TLT.

NKE

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Gold

Gold fails to hold support at 1300.

Gold

Rates Rising, 10’s At New 2018 Highs

The TNX(10-Year Treasury Yield Index)is surging today.  The TNX is now trading at its highest level since July 2011:

tnx

Less Than 10% To Go

91% of S&P 500 companies have reported 1st quarter earnings.  The results have been impressive,  up 26% year-over-year,  strongest since 2010.

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Rollbacks matter…

Hat tip Charlie Bilello

Target Tracking Toward A Breakout

tgt

Target is beginning the new week with an impressive gain.  The stock has been stuck in a narrow range since a nasty sell off back on March 6th.  Might this sideways pattern soon end with an upside resolution?  The odds are increasing.  With less than an hour to go in the session shares are up nearly 4% on accelerating trade.  This impressive move has driven TGT to new May highs and within easy striking distance of a meaningful breakout.  Just last month the stock was tracing out a similar set up but failed to clear heavy resistance near $73.70.   With earnings on the horizon(May 23rd)TGT is poised once again for a fresh rally leg.

Trading notes:  

TGT is pennies away from piercing a key overhead trendline that links the March and April highs. 

A clear take out of the $73.70 area will clear multi-week April highs.

Nearby support is now in place between $72.30(initial May high)and $71(last week’s high).  A close back below $68.00 would violate the May low indicating more range bound trade is ahead.

TGT sports a rather high SIR(10.3).  Since the near breakout back on April 30th the short interest ratio has increased.  Quite a bit of potential upside fuel to say the least.

Earnings are due next week(May 23/AM). 

Analysts at Baird made positive comments about the company today.  Baird has an “Outperform” rating on the stock and a price target of $85.00.

At time of publication we are long TGT in some managed accounts.

 

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