CNBC broke the story last Wednesday that PIMCO’s Bill Gross was buying Government bonds (see story here)
Why does he like bonds now? Could part of the reason be the patterns and bond sentiment in the 2-pack below?
The charts above reflect that bullish flag patterns in the iShares Barclays 20+ Year Treasury Bond ETF (TLT) and iShares Barclays 7-10 Year Treasury Bond ETF (IEF) could have formed and bullish sentiment is now at levels where prior rallies in bonds took place
. Bonds have done well since, making almost 25% of SPY’s gains on the year, in a few days!
Another reason Bill Gross could be buying bonds is the weakness/breakdowns in the Commodity complex
reflected in the 4-pack below:
If Gross is right about a bond rally, could a breakdown in Copper and Crude Oil put downside pressure on SPY at all-time highs? Stay tuned.