With Interest Rates Looking Toppy, Bonds Could Rally Soon (IEF)

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May 30, 2018 6:15am NYSE:IEF

Technical analyst Chris Kimble examines the recent interest rate action and sees a potential top in the works.


This chart looks at the Yield on the 10-year note over the past 9-years. A double bottom looks to have taken place as it hit identical lows in 2012 and 2016.

Yields have rallied since the lows in 2016 and are now testing the same level where they peak in 2013 at (1).

Is a double top taking place at (2), which is the same level as 2013 as momentum is also hitting lofty levels at (2). The rally in yields and the decline in bond prices has driven sentiment to levels rarely seen in the past decade (very few bulls).

Possible that a short-term peak in yields are taking place at (2), which is the same level where rates peaked in 2013.


The iShares Barclays 7-10 Year Treasury Bond Fd (IEF) was unchanged in premarket trading Wednesday. Year-to-date, IEF has declined -1.77%, versus a 1.21% rise in the benchmark S&P 500 index during the same period.

IEF currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #10 of 28 ETFs in the Government Bonds ETFs category.


This article is brought to you courtesy of Kimble Charting Solutions.


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