Karpel’s Corner: Can Someone Please Explain the 5-Yr Treasury Yields and $TLT?

August 27, 2014
By Vlad Karpel

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

I haven’t discussed bonds in a while, but I have been watching the 20-year bond ETF $TLT closely. It’s been on an upward trend since the lows in the beginning of July, and I’ve been waiting to see some sort of pullback. Well, I have a floor insight that $115.50 is a level that will need to hold.  However, I saw a perplexing move over the last week: 5-year yields in the short-term curve.  Something will have to give, so watch the floor on $TLT.

The Buck ($UUP) has been on a tear,  with its floor at $21.70.  If this move in the greenback continues, watch out for inflation talk to heat up and strong economic numbers continuing to roll out.

Last, we talked about Oil ($USO) this week on Tradespoon Live TV.  I have to tell you that the pullback to the downside has occurred at the same rate as the upside move in the Broad Market ($SPY). With Crude ($USO) coming off the August lows, any move up could beg the question:  Does the Broad Market potentially turn negative with Crude strength?

See you next time at the Corner!

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