Bonds Look Shaky in Light of Volatility
Last night on "Mad Money," Jim dove into the heart and soul of the bond ETFs, the iShares Barclays 20+ Year Treasury Bond Fund (TLT), with an outlook not so pleasing to the eye from both the fundamental and technical perspective of the bulls.
A few factors are keeping TLT afloat at the moment. First, the promise of low rates for an extended period of time. However, this faces the threat of an economy that is starting to get back on track. If things do start to vastly improve, rates will have to come up sooner rather than later. Second, the euro zone debt crisis. If Greece comes to some kind of agreement and Italy settles down for a bit, then this support for the TLT will also vanish. One thing to remember here is while the solutions may be temporary, they will still be enough to cause technical and psychological damage to the TLT. Third, the threat of war between Israel and Iran. This one is a biggie. A war could trigger a run to TLT or just a run to cash. Unfortunately, this is probably the best hope for TLT bulls. Last, a market correction from elevated levels. Equities have had a strong run, so a pullback or some form of a correction is definitely on the table. A correction in the market would likely help TLT push higher; however, I believe it would only be temporary, thus making it an attractive short opportunity....227 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
Already a Subscriber? Please login to read the full article.
Not a Subscriber> Read the remainder of this article and take advantage of the full breadth of Real Money Pro coverage.
