Tuesday, September 20, 2016

Bonds Could Be Up On Any Rate Decision

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*If the Fed hikes investors will worry about a recession which could send bonds up.
*If the Fed holds and talks about a December hike it could send bonds up as well.
*Either way, after a big hit after the ECB meeting bonds could work there way higher again either thanks to the Fed or the BOJ.

We had a call showing a key support that if broken could cause bonds (NYSEARCA:TLT) to "give back the Brexit move." In fact the market broke that line and went lower and gave back that Brexit move. We are now much lower going into the FOMC meeting. Whether they hike or hold it could help longer term bonds either way. Add to that the BOJ may increase its easing posture which could reverse the bearish hit from the ECB.
First let's look at the chart we showed August 29th.
Source: Interactive Brokers
Above was the chart we showed about one month ago. 138 on TLT was a key support level. It had held to that point.
Here's the chart today.

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