Let’s Talk About Bonds
Bonds are up, and people are talking, so let’s join in and discuss their price action.
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The Market
Shall we talk about bonds? Of course, we should. After all, it’s been a few days!
TLT has now rallied two points in a week, and still, I hear very few people saying they like the bonds. Instead, I hear grumbling about how Secretary Bessent shouldn’t fight the bond market.
I am the last person who can explain to you exactly what all these moves the Treasury Secretary is making mean for the market. What I can tell you is that TLT crossed that resistance level at 83. I would say 84 is likely to be a tough resistance area (red line). I will even couch it at 84-84.50. I suspect if I am correct and TLT makes it there, we will see sentiment shift.
Oh it might not shift toward folks saying Secretary Bessent is correct; rather, there will be some ‘market’ reason given. Like inflation backed off, or the Fed did something. Either way, I would prefer to see TLT stay over 83 now.
And the Utes? They are trying to bottom. It’s now been three days since that big whack, so I would expect them to start shaping up now, too.
Let me end by noting that the DSI for the VIX is back to 15. I am unsure how to square that with the upcoming oversold condition in Nasdaq.
New Ideas
With oil coming back down (see last week that I opted to take profits in the energy names), I was asked about natural gas. We’ll use the chart of UNG. 10.50 is some decent resistance. I think it can get over that. I would consider myself wrong if it breaks back under 9.75.
I was also asked about the banks, which I still am not a fan of. However, in late July, I did say I thought Citigroup (C) was finally improving, and I would reiterate that view. As long as Citi stays over this trend line, I am in favor of it.
Today’s Indicator
The McClellan Summation Index is still heading down, albeit with very little oomph.
Q&A/Reader’s Feedback
Innodata (INOD) could really use a gap fill around 50 because if it can get down there, I would expect that to be some decent support. Alternatively, if it crosses the downtrend line around 68, I would give it some credit, but I’d rather see it at that 50 area.
Novo Nordisk (NVO) has had so many whooshes down it makes me hesitant to dive in. For the time being, I will say I think it can get to 50, which would fill the gap (from late July) and run into that downtrend line. If it manages to get over 50, I’d be more encouraged.
O’Reilly Automotive (ORLY) has so much resistance all the way up, yet it has that feeling of trying to bottom. It’s hard to put an exact number on where I would stop myself out, but I’d prefer not to see it back under 87, last week’s spike low. Over 94 is a mini breakout.
There was a time many years ago that Sea Ltd (SE) was such a hot stock that I hadn’t looked at it in ages. There are layers of resistance all the way up, but as long as that uptrend line is intact, it’s a decent chart.
Peloton (PTON) seems stuck in a trading range between 4.75 and 6.75. If it rallied to the upper end, it would fill the gap, so I’d be in favor of selling it on such a rally.
Roblox (RBLX) is a stock in a downtrend. In fact, you’d think with the stock having already been chopped to nearly a third of what it was, it couldn’t gap down again, and yet that’s exactly what it did in late July. If it can get over 40, I would think the gap fill at 45 ends that run. As I have said so often lately, this might be a candidate for a year-end tax loss selling bounce.
