A Few Bond ETFs That Have Performed Well, Despite Rising Interest Rates

Posted on by Matt Thalman

Investors who buy bonds or bond funds are doing so because they want to reduce their risk and preserve their capital. Bonds work very well at doing this when the stock market or economy is declining, but not when economic conditions are strong.

Currently, the US economy is strong with 4% GDP growth, the S&P 500 coming close to setting a new all-time high, the unemployment rate at the lowest level its been in years. All of these indicators point towards the opposite of what bond investors want, especially the need for higher interest rates as inflation continues to creep higher.

Recently JP Morgan Chase’s CEO, Jamie Dimon, said he thought the 10-year Treasury yield should be at 4%, not where it currently sits at the below 3%. He went further and said that 5% interest rates are coming and that investors need to start preparing. Some have argued that interest rates should already be in the 4% to 5% range.

If, Dimon and others are correct in their prediction that higher interest rates are coming than current bond holdings need to “Get out of Dodge” before they get burnt. We have already seen bond funds take a hit in 2018, but if rates do climb as high as 5%, the losses we have seen thus far may dwarf what is to come.

Not surprisingly the best Bond Exchange Traded Funds over the past year are the 3X leveraged short funds. Continue reading "A Few Bond ETFs That Have Performed Well, Despite Rising Interest Rates" →

Trade Triangles Hit The Target

Posted on by The INO.com Team

Hello traders everywhere. Target Corporation (TGT) posted its strongest sales growth in more than a decade posting a 6.5% increase in the second quarter of this year, and the stock price jumped more than 5% in early trading. As my headline states, the Trade Triangles hit the target when it came to Target. A green monthly Trade Triangle was issued a little over a year ago at the $58.65 and with Target trading at $87.44 that's a +48% increase!

Now I'm not going to lie to you and say that I took this trade and made a significant profit, cause I didn't. I remember looking at the Trade Triangle list as I do every day and I saw Target on the list, and I passed on it. At that time I was of the thinking that brick and mortar retail just didn't fit into my trading thoughts as it was struggling. This is indeed a lesson in not overlooking a market because of how you feel about a particular sector.

target

We finally got the record high from the S&P 500 that we've been waiting for with it hitting an all-time high of $2,873.23 before backing off that high and eeking out a +.2% gain on the day. Today the stock market is mixed to unchanged after hitting the record, and that's mostly due to political uneasiness surrounding President Donald Trump and a growing tariff worry as many of the imposed tariffs are starting to affect businesses.

Key Levels To Watch This Week:

Continue reading "Trade Triangles Hit The Target" →

Gold & Silver: Hard Ground or Quicksand?

Posted on by Aibek Burabayev

I know that most of the readers don’t like when I post bearish outlooks for the top metals as even if there are dozens of downloads, still nobody pushes the “like” button. It could be a fascinating research subject for behavioral finance or at least an excellent contrarian indicator.

Frankly speaking, I keep an unbiased stance and share my view of the structures that develop in the market. I just read signals that the market sends us all the time. From the start of the year, there are totally bearish outlooks were posted as we had strong signs in the charts and we can see that they proved to be right and one could make good money.

In this post I would like to address the question that arises these days, is this recent bounce a reversal or just another correction?

Let’s start with gold.

Gold Weekly Chart: Market Eyes $1122 To Complete The Structure

Gold Weekly Chart
Chart courtesy of tradingview.com

Before we start I recommend that you check out this earlier gold chart to see the price and triggers’ position before the drop and signals, which I outlined in that post to refresh your memory as more than six months passed. Continue reading "Gold & Silver: Hard Ground or Quicksand?" →

Trade Talk Optimism Puts Record High In Sight

Posted on by The INO.com Team

Hello traders everywhere. After a strong finish to last weeks trading the stock market once again opened within striking distance of the S&P 500's all-time high set on on Jan. 26 of this year. In fact, it was sitting just 15 pts shy of that mark in early trading but has since backed off a touch as we enter afternoon trading. However, that's proven to be a tough level to crack.

The reason for last week's mid-week reversal was due to reports of planned trade talks between the United States, and China raised hopes of a potential resolution in the ongoing trade war. Lower-level trade talks will be held on Aug. 22 and 23, according to the Wall Street Journal, just as new U.S. tariffs on $16 billion of Chinese goods take effect, along with Beijing's retaliatory tariffs on an equal amount of U.S. goods.

Trade Talk Optimism

This week could also be record-setting for the U.S. stocks market for another reason. On Wednesday, the bull market turns 3,453 days old. Barring a 20% decline between now and then, some investors believe it would mark the most extended bull market in history while other investors think that the S&P 500 needs to make a new high by Wednesday for it to become the longest bull market in history. No matter what, the S&P 500 is up over 300% in that time. Quite unbelievable! Continue reading "Trade Talk Optimism Puts Record High In Sight" →

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the December contract is currently trading at 1,187 an ounce after settling last Friday in New York at 1,219 down about $32 for the week while trading as low as 1,167 in Thursday's trade before profit-taking took place pushing prices back up to today's levels. If you have read any of my previous blogs, you understand that I am bearish all of the precious metals across the board. If you are short, place the stop loss above the 10-day high which now stands at 1,226, however, the chart structure will not improve for another four trading sessions as I still believe we will retest major support around the 1,125 level in the coming weeks ahead. The U.S dollar is down about 30 points today trading lower for the 2nd consecutive session, but that remains in a bullish trend as that has been the main culprit for gold prices coupled with the fact that there is very weak demand and very little interest at the current time. Presently I am also recommending a bullish S&P 500 trade which is unchanged today but remains strong as money flows continue to go into U.S. equities & out of the precious metals. I see no reason to own gold and no reason to try and bottom fish and take a bullish position at this time as that would be counter-trend trading which is very dangerous in the long run. Silver prices this week also hit a contract low & remains weak as that is also putting pressure on gold as these trends are getting stronger on a weekly basis and I still think there is one more leg to the downside ahead.
TREND: LOWER
CHART STRUCTURE: IMPROVING
VOLATILITY: AVERAGE
Continue reading "Weekly Futures Recap With Mike Seery" →