T Bonds Constructive

Short-term Treasuries would be the receptacles of a flight to ‘quality’, liquidity, risk ‘OFF’.  The longer-term bonds would be a more risky risk ‘OFF’ play, with more potential gain as well.  Here are some daily charts with short-term implications.

SHY (1-3 yr bonds) is looking good as it marches along in its up trend.  In the absence of payouts from ultra short-term T Bills, this is what I use for a cash equivalent because it rolls over interest rate increases rather quickly (the chart of SHY looks similar to the chart of the 2 year Note yield on its trend, though it goes inverse on a daily basis).

shy

IEI (3-7 yr) has gone sideways all year but is in a bullish looking pattern above the moving averages.

iei

IEF (7-10 yr), there’s a slightly less attractive version of the bullish looking pattern again.

ief

TLT (20+ yr) has put in a pattern and bounced, right to a trend line.

tlt

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