Wednesday, May 8, 2013

Bonds are for Fools:

In the last post we looked at two U.S. integrated energy giants, Chevron Corporation (CVX) and Exxon Mobil Corporation (XOM) which have over the past 36 months been building huge bullish ascending triangles.

Now a look at the US 10-yr T-bond yields at 1.76 % (divide the scale by 10) plotted over the Select SPDR Energy ETF (XLE) displays two conditions. There is high price correlation and there is high cyclic commonality. Clearly the XLE is breaking up and out of a large bullish symmetrical triangle and so it is reasonable to assume the US 10-yr T-bond yields have nowhere to go but up. Long bonds are for fools so look for the iShares Barclays 20+ Year Treas Bond (TLT) $120.35 to break down through the 200 day MA down the at least $109 to complete a huge head & shoulders top.


Shawn Severin said...

Hi Bill,

What's your take on the XEG?

Shawn said...

Hi Shawn

The XEG is a go-to place

Bill C