Bond Market Update
Two weeks ago the yield on bonds rose to a new high for the year surpassing the May high recent. The peak yield on the 10 year came on October 5th at 3.24 and closed yesterday at 3.20. The 30 year peaked on the 5th as well at 3.42 and is now at 3.34.
Last week we wrote that the iShares Barclays 20 Year Treasury Bond Fund ETF (TLT) needs to get back above $115.41 or the risk is a fall to $97.97 which would be the 2013 low.
The $97.97 level is based on the retracement from the 2013 low to the 2016 high. Unfortunately, the last retracement level of 61.8% was broken this month. Pay attention to bonds closely.
A rise in yields above 3.30% on the 10 year and 3.50 on the 30 year are that point in time where, "...it crossed the line, now its time to say f/u."
With stocks in free fall this morning, that seems unlikely and it may be time to sneak into some bonds.
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